Which of the Following Is Least Likely to Result in a Constructive

question 82

Multiple Choice

Which of the following is least likely to result in a constructive dividend?

• A)an unreasonable salary paid to a shareholder
• B)a sale of a corporation's asset to a shareholder at fair market value
• C)a payment by a corporation of a shareholder's debts
• D)a payment by a corporation of a shareholder's personal expenses

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Definitions:

Perfect Competitors

Firms that are so numerous and small in relation to the market they serve that they have no power to alter the market price of their product, characterized by a lack of market dominance.

Economic Profit

Profit exceeding the opportunity cost of resources used, indicating a return greater than the most lucrative alternative.

ATC Curve

Refers to the Average Total Cost curve, which represents the average cost per unit of output, calculated by dividing total cost by the quantity of output produced.

Excess Capacity

A situation where a firm is producing at a lower scale of output than it has been designed for.