The only risk that existed is associated with the value of the investment. Corporation can also issue commercial paper in the form of bonds to raise capital as well. Bonds are sold in lots of $1000 face value bonds that pay a predetermined coupon or interest rate.
All corporations that are publicly traded in the United States is obligated to comply with the Sarbanes Oxley Act of 2002. Sarbanes Oxley (SOX) was created in order to protect investors and create greater accountability in order to raise investor confidence in the reliability of the financial markets. A provision that affected the way accounting firm perform business with companies is the prohibition of accounting doing both the audits and other types of business contracts with the same firm. Now the accounting audits are performed by independent auditors. A company can become delisted it fails to comply with the Sarbanes Oxley violation. For example a company that is caught cooking up the numbers could face severe penalties from the Security and Exchange Commission (SEC).
Trademarks can add a lot of value to the corporation if they are properly marketed. The legal protection the trademark provides ensures that other firm cannot imitate their trademark names and other types of intellectual property. If another company or individual violates the trademark of a company the firm that is hurt can sue the person or corporation responsible for the trademark violation. Two companies that have been able to penetrate global marketplaces due to its trademark property are McDonald’s and Starbucks Café.
It takes on the average 16 years and $800 million dollars to develop a new drug. Due to the high cost of developing prescription drugs is the reason why so many drugs are so expensive. Patents provide social justice to business for their investment. A patent creates a temporary monopoly for the holder of the patent. Companies can charge whatever price they please during the protected period due to the fact