An american restaurant owner convinces several friends to him pay the costs to open a second location. if the new restaurant succeeds, the owner and his friends will share the profits. if it fails, however, all of them will split the losses. this situation is most similar to which of the following? a. the creation of a joint stock company b. the expansion of the consumer market c. the regulation of businesses under mercantilism d. the changing of prices according to supply and demand

The correct answer is "A".

In order to grow the business, one of the financing options the owner has in order to fulfill this project is to search for partners that would invest in the business. This is a good option because, even though it might reduce the owner's potential profits, it also diminishes the risk that involves an eventual failure of the project.

In a major scale, the owner may opt to execute an IPO (Initial Public Offering), in which the company emits stocks that sell at an initial price and are offered to the public. Stocks are a percentage of the ownership of the company and are also an effective way to raise funds.

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