A Corporation May Not Legally Give Shares of Its Stock

question 199

True/False

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

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Definitions:

Depreciation

The systematic reduction in the recorded cost of a fixed asset over its useful life.

Quick Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets; also known as the acid-test ratio.

Current Assets

Assets that are expected to be converted into cash or used up within one year or one business cycle, whichever is longer.

Current Liabilities

Short-term financial obligations due within one year, such as accounts payable and short-term loans.