Which of the Following Situations,by Itself,would Not Justify a Court

question 12

Multiple Choice

Which of the following situations,by itself,would not justify a court disregarding the corporate entity?

• A) The corporation failed to follow the necessary corporate formalities.
• B) The corporation is severely undercapitalized.
• C) The corporation does not have enough assets to pay its liabilities.
• D) The shareholders have looted the corporation.
• E) The corporation has been used by its shareholders to commit fraud.

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Definitions:

Discount Rate

The interest rate charged by central banks on loans they provide to commercial banks.

Growth Dividend Policy

A strategy where a company intends to pay out increasing dividends over time as it reinvests profits to fuel growth and expansion.

Eps Growth Rate

The annual rate at which a company's earnings per share (EPS) has grown over a specified time period.

Rate Of Return

The gain or loss of an investment over a certain period, expressed as a percentage of the investment's initial cost.