Which of the Following Statements Is Correct

question 50

Multiple Choice

Which of the following statements is correct?

• A)A corporation receives a monetary payment every time its shares of stock are traded by stockholders on organized stock exchanges.
• B)When a corporation sells bonds as a means of raising funds it is engaging in debt finance.
• C)A share of stock is an IOU.
• D)The two most important financial markets in the economy are the stock market and financial intermediaries.

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Definitions:

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing and signed by the involved parties, to prevent fraud.

Force Majeure

A legal clause exempting parties from fulfilling contractual obligations due to unforeseeable circumstances beyond their control, such as natural disasters.

Oral Agreement

A verbal commitment between two or more parties on a set of terms, which can be legally binding in certain circumstances.

Gifts and Gratuities

Items or payments given voluntarily without payment in return, often as a gesture of goodwill or for promotional purposes.