Which of the Following Statements Is False

question 113

Multiple Choice

Which of the following statements is false?

• A) Bondholders would be paid before stockholders in a liquidation.
• B) Dividends are not required to be paid to stockholders.
• C) Bondholders are owners while stockholders are creditors.
• D) Bondholders receive a fixed interest while stockholders are paid only if earnings are sufficient.

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Definitions:

Regulation S-X

A regulation set forth by the SEC that prescribes the form and content of financial statements to be submitted by public companies in the US.

Financial Statements

Reports that summarize the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.

Public Utility Holding Company Act

A law enacted in 1935 to regulate the electric utility companies by restricting their operations and ensuring they operate within their designated jurisdictions.

Trust Indenture Act

A federal law in the United States that imposes regulations on the issuance of certain securities, including requiring a formal agreement between bond issuers and trustees.