The Par or Stated Value of Ordinary Shares Is Important

question 39

Multiple Choice

The par or stated value of ordinary shares is important for

• A) helping the market determine the trading price of the share.
• B) accounting purposes only.
• C) helping the board of directors determine the dividend payout.
• D) helping the investor determine the share's intrinsic value.

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Definitions:

Statutory Authority

Legal or formal power granted to an entity or individual by legislation to perform certain actions or enforce laws.

Shareholder Class Action

A lawsuit filed by one or more shareholders on behalf of a group of shareholders against a company, its management, or its board of directors for actions that have harmed the shareholders' interests.

Reasonable Litigation Expenses

Costs that are considered necessary and appropriate for the conduct of a legal case, including attorney fees, court fees, and other related expenses.

Defendants' Punitive Damages

Financial compensation that a defendant may be ordered to pay, over and above the actual damages, to punish and deter particularly egregious conduct.