A Parent Might Attempt to Resolve a Transfer of Ownership

question 88

Multiple Choice

A parent might attempt to resolve a transfer of ownership by giving active children in the firm's management _____ stock and giving nonactive children _____ stock.

• A) distributed, undistributed
• B) growth, speculative
• C) common, preferred
• D) dowry, canonical

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Definitions:

Preexisting Moral Obligation

A moral duty or responsibility that already exists before any new agreement or contract is made.

Consideration

The value (such as money, a service, or a promise) that is exchanged between parties in a contract.

Doctrine of Promissory Estoppel

A legal principle that prevents a promisor from retracting a promise that the promisee has relied upon, resulting in a significant change of position.

Disputed Debt

A disagreement between a creditor and a debtor over the existence, amount, or terms of repayment of a debt.