ABC Corporation Is Financed by Both Debt and Equity

question 73

Multiple Choice

ABC Corporation is financed by both debt and equity.In its shareholder agreement, it promises to pay monthly dividends to all shareholders.Recently, it has come into some financial trouble and is having trouble making payments.Which of the following is true?

• A)ABC should pay dividends or risk bankruptcy.
• B)ABC should pay its creditors or risk bankruptcy.
• C)ABC must pay dividends or it risks being sued for breach of contract.
• D)ABC must pay both dividends and its creditors or risk bankruptcy.
• E)ABC should declare bankruptcy now to avoid any obligations it currently has.

---

Definitions:

Contemporary American Society

Refers to the social, economic, political, and cultural dynamics and issues present in the United States during the late 20th and early 21st centuries.

Geographic Space

An area or extent that can be measured, described, or defined, often in terms of physical geography.

Shoplifted

The act of stealing goods from a retail establishment without paying for them.

Illicit Gambling

Refers to unauthorized or illegal forms of gambling that are not permitted under law.