Which of the Following Is Not a Reason for a Stock

question 82

Multiple Choice

Which of the following is not a reason for a stock redemption?

• A) No outside market exists for the stock.
• B) desire by shareholders to reduce the corporate tax liability
• C) Redemption of shares is a good corporate investment.
• D) desire by remaining shareholders to retain control

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Definitions:

Accounting

The systematic process of recording, analyzing, summarizing, and interpreting financial transactions and information.

Equitable Remedy

A judicial order enforcing a party to act or refrain from acting in a certain way, based on principles of fairness.

Specific Performance

A legal action taken to compel a party to carry out the terms of a contract rather than awarding damages for breach of contract.

Injunction

A legal order issued by a court that directs an individual or organization to do or refrain from doing a specific act, used to prevent harm or secure relief.