A Corporation Is Not Committed to a Legal Obligation When

question 163

Multiple Choice

A corporation is not committed to a legal obligation when it declares

• A) a cash dividend.
• B) either a cash dividend or a share dividend.
• C) a share dividend.
• D) a distribution date.

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Definitions:

Bonds

Bonds are debt securities issued by entities (such as governments, municipalities, or corporations) to raise funds, promising to repay the principal along with interest on a specified date.

Money Market

A financial market in which short-term (less than one year) debt securities are traded.

Debt Instruments

Financial contracts obligating the borrower to pay back the lender, including bonds, notes, and mortgages.

One Year

A period of time consisting of 12 months or 365 days, commonly used as a basis for calculating interest, returns, and performance metrics.