Identify Which of the Following Statements Is True

question 4

Multiple Choice

Identify which of the following statements is true.

• A)A corporation accumulates earnings to fund the redemption of a shareholder's stock following her death so as to provide her estate with liquidity to pay death taxes. Such an accumulation of earnings is a reasonable business need.
• B)A corporation accumulates earnings to fund a buy-sell agreement. Such an accumulation of earnings is a reasonable business need.
• C)A corporation's net capital gain (minus any federal income taxes paid with respect to such gain)increases the tax base for the accumulated earnings tax.
• D)All of the above are false.

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Definitions:

Hormones

Chemical messengers that are produced by the endocrine glands and carried by the bloodstream to all parts of the body.

Hypothalamic-Pituitary-Adrenal Axis

A complex set of interactions among the hypothalamus, pituitary gland, and adrenal glands, regulating stress response.

Chronic Stress

A persistent state of stress that can lead to long-term health problems, including anxiety, depression, and cardiovascular disease.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body goes through when exposed to chronic stress, as proposed by Hans Selye.