Which of the Following Statements Describes the Company Characteristic Termed

question 97

Multiple Choice

Which of the following statements describes the company characteristic termed double taxation?

• A)Companies pay income tax on company earnings, and shareholders pay personal income tax on company dividends and gains from sale of shares.
• B)The liabilities of the company cannot be extended to the personal assets of the shareholder.
• C)Company shares can be readily bought and sold by investors on the open market.
• D)Shareholders are not authorised to sign contracts or make business commitments on behalf of the company.

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Definitions:

Exchange Rate

The exchange rate reflecting the value of one currency compared to another.

Spot Exchange Rate

This is the current exchange rate at which two currencies can be exchanged immediately.

Eurocurrency

Currency deposited by national governments or corporations in banks outside their home market, primarily used for lending, borrowing, and investing internationally.

Political Risk

The risk of losing money due to political instability or changes in government policy affecting an investment.