Identify Which of the Following Statements Is True

question 3

Multiple Choice

Identify which of the following statements is true.

• A)To be part of an affiliated group, a corporation must be at least 80% directly owned by another group member.
• B)Only common stock is considered when determining if the 80% ownership test is met for affiliated group eligibility.
• C)An affiliated group electing to file a consolidated return may be composed of as few as two corporations.
• D)All of the above are false.

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Definitions:

Paid-In Capital

Funds raised by a company through the issuance of common or preferred stock, representing the capital contributed by shareholders in exchange for shares.

No-Par Stock

Refers to shares issued without a nominal or face value, where the price is determined by the market or the company's board.

Treasury Stock

Shares that were issued by a company and then repurchased, not considered when calculating dividends or earnings per share.

Par Value

A nominal or face value assigned to a security or stock, which may bear no relation to its market value.