If a Corporation Distributes Cash to Its Shareholders, Then

question 206

Multiple Choice

If a corporation distributes cash to its shareholders, then

• A) there has been a violation of accounting principles.
• B) equity will increase.
• C) equity will decrease.
• D) there will be a new liability showing the shareholders owe money to the business.

---

Definitions:

Spot Rate

The present going rate for a specific currency to be purchased or exchanged, available for prompt delivery.

Hedge

A financial strategy used to reduce the risk of adverse price movements in an asset.

Hedge

An investment position intended to offset potential losses or gains that may be incurred by a companion investment, commonly used for risk management.

Exchange Variations

Refers to the fluctuations in the value of currencies in the foreign exchange market, impacting the value of foreign currency transactions.