Question: Question 5 1 0 pts Limited liability becomes more important for firms trying to raise funds from a large number of investors, rather than from

Question

5

10

pts

Limited liability becomes more important for firms trying to raise funds from a large number of investors, rather than from a small number of investors, because

investors that make a small investment in a firm are willing to risk all their personal assets if the firm fails.

investors that make a small investment in a firm may be unwilling to risk all their personal assets if the firm fails.

investors that have a large investment and who can exercise control in the firm, do not want to be responsible for the firm's debts.

the shareholders are usually very confident that the firm they have invested in is not at risk to fail.

Question 5 10 pts Limited liability becomes more important for firms

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