Identify Which of the Following Statements Is False

question 21

Multiple Choice

Identify which of the following statements is false.

• A) A person who holds an option to acquire stock is considered to own the stock for purposes of the PHC stock requirements.
• B) Stock owned by an individual, in addition to stock attributed from her spouse, parents, children, and siblings, are all counted towards whether or not the personal holding company stock ownership test has been met.
• C) Askew Corporation has ten unrelated shareholders, each of whom owns 10% of the outstanding stock. This corporation is a personal holding company.
• D) S corporations and tax- exempt organizations are excluded from the personal holding company (PHC) definition.

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Definitions:

Actual Authority

Authority given to an agent expressly or by implication.

Estoppel

An equitable remedy that stops a party from trying to establish a position or deny something that, if allowed, would create an injustice.

Ratification

The action of officially approving or confirming an agreement or act, making it valid.

Apparent Authority

Authority as suggested to a third party by the conduct of a principal; may exist even when there is no actual authority.