Which of the Following Statements Is NOT Generally True About

question 76

Multiple Choice

Which of the following statements is NOT generally true about the legality of dividend distributions?

• A)No amounts may be distributed unless the corporate capital is left intact.
• B)The corporation must still be able to pay its liabilities when they become due.
• C)A corporation may not pay dividends that are higher than their legally available retained
• Earnings.
• D)Dividends do not need to be formally approved by the Board of Directors.

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Definitions:

Antitrust Laws

Laws designed to promote competition and prevent monopolies by regulating business practices that may restrain trade or lead to an unfair concentration of market power.

Deceptive Advertising

Marketing practices that mislead or deceive consumers into believing something about a product or service that is not true or fully disclosed.

Celler-Kefauver Act

A United States antitrust law passed in 1950, aimed at preventing anti-competitive mergers and acquisitions by closing loopholes in the earlier Clayton Antitrust Act.

Clayton Act

A United States antitrust law enacted in 1914, aimed at promoting competition by preventing unfair business practices such as price discrimination and exclusive dealings.