Which of the Following Numbers of Shareholders Is Allowed in a Subchapter

question 51

Multiple Choice

Which of the following numbers of shareholders is allowed in a subchapter S (or S) corporation business form?

• A)100
• B)125
• C)130
• D)500

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Definitions:

Net Worth

The total assets minus total liabilities of an individual or company, indicating financial health and stability.

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company makes after paying for variable costs of production but before paying interest or tax.

Depreciation Expenses

Depreciation expenses refer to the systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset over time.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating the tax impact on their next dollar of income.