Which of the Following Statements Best Describes How Corporate Law

question 57

Multiple Choice

Which of the following statements best describes how corporate law protects creditors?

• A) Creditors can enforce restrictions on the ability of the corporation to pay dividends to shareholders.
• B) Corporate law does not protect creditors.
• C) Creditors must protect themselves by contract.
• D) Corporate law rules restricting the payment of dividends to shareholders unless certain financial tests are satisfied protect creditors by keeping money in the corporation.
• E) Directors have a duty to protect the interests of creditors.

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Definitions:

Sponsorship

The act of supporting an event, activity, person, or organization financially or through the provision of products or services.

Mission

The core purpose or goal that guides an individual, organization, or group, providing a sense of direction and focus.

Costs and Benefits

An analysis or consideration of the expenses associated with an action versus the advantages gained from that action.

Agency Staff

Workers or personnel employed through or by a staffing agency, often for temporary or contract positions.