Which One of the Following Statements Is Correct

question 54

Multiple Choice

Which one of the following statements is correct?

• A) The majority of firms in the U.S. are structured as corporations.
• B) Corporate profits are taxable income to the shareholders when earned.
• C) Corporations can have an unlimited life.
• D) Shareholders are protected from all potential losses.
• E) Shareholders directly elect the corporate president.

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Definitions:

Incremental Value

The additional value generated by undertaking a new project or decision, calculated as the difference between the value with and without the project.

Outstanding Stock

Outstanding stock is the total number of shares of a corporation that have been issued and are held by shareholders, including restricted shares owned by the company's officers and insiders.