DECA Entrepreneurship Vocabulary questions with
complete solutions A+ rated
1. acquisition: The purchase of a company by another, larger firm, which absorbs the
smaller
company into its operations.
2. board of A group of individuals elected by a firm's shareholders and charged
direc- tors:
with oversee- ing, and taking legal responsibility for, the firm's actions.
3. business plan: Document in which the entrepreneur summarizes her or his business
strategy for the proposed new venture and how that strategy will be
implemented.
4. chief executive of- The person responsible for the firm's overall performance.
ficer (CEO):
5. co-operative: An organization that is formed to benefit its owners in the form of reduced
prices and/or the distribution of surpluses at year-end.
6. common stock: Shares whose owners usually have last claim on the corporation's assets
(after
creditors and owners of preferred stock) but who have voting rights in
the firm.
7. conglomera A merger of two firms in completely unrelated businesses.
te merger:
8. corporate
The relationship between shareholders, the board of directors, and other
gover- nance:
top managers in the corporation.
9. divestiture: Occurs when a company sells part of its existing business operations
to another company.
10. employee plan (ESOP):
stock
ownership
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18
, DECA Entrepreneurship Vocabulary questions with
complete solutions A+ rated
when a corporation buys
its own stock with
loaned funds and giving
them to its employees.
Employees "earn'' the
stock based on some
condition such as
seniority. Employees
control the stock's voting
rights immediately, even
though
they may not take
physical possession of
the stock until specified
conditions are met. This
aligns the employees'
interest with those of the
shareholders, as they are
shareholders
themselves.
2/
18
, DECA Entrepreneurship Vocabulary questions with
complete solutions A+ rated
11. entrepreneur: A business person who accepts both the risks and the opportunities
involved in
creating and operating a new business venture.
12. franchise: a form of business by which the owner (franchisor) of a product, service
or method obtains distribution/marketing through aflliated dealers
(franchisees). example: mcdonalds
13. franchisin Specifies the duties and responsibilities of the franchisee and the
g franchiser.
agreemen
t:
An acquisition in which the management of the acquired company
14. friendly
welcomes the firm's buyout by another company.
takeove
r:
15. general partner: A partner who is actively involved in managing the firm and has
unlimited liability.
16. horizontal A merger of two firms that have previously been direct competitors in the
merg- er:
same industry.
17. hostile takeover: An acquisition in which the management of the acquired company
fights the firm's buyout by another company.
18. initial public Selling shares of stock in a company for the first time to the general
of- fering
investing public.
(IPO):
19. inside directors: Members of a corporation's board of directors who are also full-time
employees of the corporation.
20. limited liability: Investor liability is limited to their personal investments in the corporation;
courts cannot touch the personal assets of investors in the event that
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18
complete solutions A+ rated
1. acquisition: The purchase of a company by another, larger firm, which absorbs the
smaller
company into its operations.
2. board of A group of individuals elected by a firm's shareholders and charged
direc- tors:
with oversee- ing, and taking legal responsibility for, the firm's actions.
3. business plan: Document in which the entrepreneur summarizes her or his business
strategy for the proposed new venture and how that strategy will be
implemented.
4. chief executive of- The person responsible for the firm's overall performance.
ficer (CEO):
5. co-operative: An organization that is formed to benefit its owners in the form of reduced
prices and/or the distribution of surpluses at year-end.
6. common stock: Shares whose owners usually have last claim on the corporation's assets
(after
creditors and owners of preferred stock) but who have voting rights in
the firm.
7. conglomera A merger of two firms in completely unrelated businesses.
te merger:
8. corporate
The relationship between shareholders, the board of directors, and other
gover- nance:
top managers in the corporation.
9. divestiture: Occurs when a company sells part of its existing business operations
to another company.
10. employee plan (ESOP):
stock
ownership
1/
18
, DECA Entrepreneurship Vocabulary questions with
complete solutions A+ rated
when a corporation buys
its own stock with
loaned funds and giving
them to its employees.
Employees "earn'' the
stock based on some
condition such as
seniority. Employees
control the stock's voting
rights immediately, even
though
they may not take
physical possession of
the stock until specified
conditions are met. This
aligns the employees'
interest with those of the
shareholders, as they are
shareholders
themselves.
2/
18
, DECA Entrepreneurship Vocabulary questions with
complete solutions A+ rated
11. entrepreneur: A business person who accepts both the risks and the opportunities
involved in
creating and operating a new business venture.
12. franchise: a form of business by which the owner (franchisor) of a product, service
or method obtains distribution/marketing through aflliated dealers
(franchisees). example: mcdonalds
13. franchisin Specifies the duties and responsibilities of the franchisee and the
g franchiser.
agreemen
t:
An acquisition in which the management of the acquired company
14. friendly
welcomes the firm's buyout by another company.
takeove
r:
15. general partner: A partner who is actively involved in managing the firm and has
unlimited liability.
16. horizontal A merger of two firms that have previously been direct competitors in the
merg- er:
same industry.
17. hostile takeover: An acquisition in which the management of the acquired company
fights the firm's buyout by another company.
18. initial public Selling shares of stock in a company for the first time to the general
of- fering
investing public.
(IPO):
19. inside directors: Members of a corporation's board of directors who are also full-time
employees of the corporation.
20. limited liability: Investor liability is limited to their personal investments in the corporation;
courts cannot touch the personal assets of investors in the event that
3/
18
