Which of the Following Is Not a Common Feature of Closely

question 4

Multiple Choice

Which of the following is not a common feature of closely held corporations?

• A)The corporations have only one, or relatively few, shareholders.
• B)The business of these corporations is often sold due to the owner's wish to retire.
• C)The sale of these corporations may be structured in a way that allows family members or employees with minimal funds to buy the business.
• D)These corporations pay regular dividends to their public shareholders.

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Definitions:

Without Recourse

A term indicating that the seller of an asset is not responsible for the buyer's losses if the asset fails to perform as expected.

Bad Debt Risk

The probability that loans or receivables will not be collected and will result in a loss for the lender or creditor.

Commitment Fee

A banking charge imposed on a borrower to keep a line of credit open or to guarantee a loan's terms.

Bank Line

A bank line or line of credit is an arrangement between a financial institution and a customer that sets the maximum loan balance that the borrower can access.