Which of the Following Statements Is TRUE Regarding the Disposal

question 4

Multiple Choice

Which of the following statements is TRUE regarding the disposal of shares by a shareholder?

• A)When a shareholder sells shares to other shareholders, the corporation's capital base increases.
• B)The sale of shares to other shareholders is known as a 'buy-back'.
• C)The sale of shares back to the corporate treasury is not an allowable transaction.
• D)The sale of shares to the corporate treasury may result in a deemed dividend and a capital gain or loss to the shareholder.

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Definitions:

Equivalent

Equal in value, measure, force, effect, significance, etc. Often used in mathematical, scientific, and logical comparisons.

Apothecary Equivalent

A term referring to the system of weight and volume measurement used historically in pharmacies and the science of pharmacy.

Fluid Ounce

A unit of volume typically used in measuring liquids, equivalent to approximately 28.4 ml in the British imperial system and 29.6 ml in the US system.

Thyroid

A gland in the neck that produces hormones regulating growth and development through the rate of metabolism.