Which of the Following Statements Is TRUE Regarding the Disposal

question 7

Multiple Choice

Which of the following statements is TRUE regarding the disposal of shares by a shareholder?

• A) The sale of shares to other shareholders is known as a 'buy-back'.
• B) The sale of shares to the corporate treasury is not allowed in the Income Tax Act.
• C) The sale of shares to the corporate treasury may result in a deemed dividend and a capital gain or loss to the shareholder.
• D) When a shareholder sells shares to other shareholders, the corporation's capital base increases.

---

Definitions:

EPS Growth Rate

Measures the year-over-year growth in earnings per share, indicating the rate at which a company's earnings are growing.

Investor's Rate

The expected or required rate of return on an investment, influencing investment decisions and portfolio management.

NPVGO

Net Present Value of Growth Opportunities; the present value of future investments' cash flows minus initial investments.

Dividend Growth Rate

The annual percentage rate of growth of a company’s dividend payments to shareholders.