KLO, Inc Has Three Separate Divisions

question 110

Multiple Choice

KLO, Inc. has three separate divisions. All three divisions produce sufficient cash flow to fund their own operations. Management was just approached and asked if they would be receptive to selling division three. Management accepted the offer and now wants to distribute some of the excess funds from that sale to the shareholders. Management is most likely to:

• A) Declare a liquidating dividend.
• B) Declare a special dividend.
• C) Increase the regular dividend.
• D) Declare a stock dividend.
• E) Do a stock split.

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Definitions:

UCC

Short for Uniform Commercial Code, it is a set of laws that provide legal framework for commercial transactions in the United States.

Consideration

A key element in contract law that involves something of value exchanged between parties as part of an agreement.

Consideration

a core concept in contract law that involves something of value exchanged between parties, which is necessary for a contract to be legally binding.

Payment

The transfer of money or goods from one party to another as a fulfillment of an obligation or settlement of a debt.