Which of the Following Is Not a Reason for a Stock

question 112

Multiple Choice

Which of the following is not a reason for a stock redemption?

• A)desire by remaining shareholders to retain control
• B)desire by shareholders to reduce the corporate tax liability
• C)Redemption of shares is a good corporate investment.
• D)No outside market exists for the stock.

---

Definitions:

Accounting Equation

The foundational formula in accounting representing assets equal to the sum of liabilities and shareholders' equity.

Initial Investment

The initial amount of money spent to start a project, purchase an asset, or invest in a business venture.

Accounting Equation

The foundational principle of accounting that states assets equal liabilities plus equity.

Accounts Payable

Liabilities representing amounts owed by a company to creditors for purchases of goods and services on credit.