When Common or Preferred Shares Are Made Available for Sale

question 12

Multiple Choice

When common or preferred shares are made available for sale to the public,the details of the shares are discussed in a legal document called

• A)articles of incorporation.
• B)share repurchase agreement.
• C)shareholder composition.
• D)prospectus.

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Definitions:

Deadweight Loss

A loss in social welfare that occurs when market equilibrium is not achieved due to externalities or market control.

Tax Structure Proposals

Recommendations or plans put forward to modify how taxes are imposed by the government, which can include changes in tax rates, bases, or the introduction of new taxes.

Pretax Income

The amount of income earned by an individual or corporation before taxes are deducted.

Benefits Principle

A taxation principle that states those who benefit from government services should pay in proportion to the amount they benefit.