Tom and Jane Are the Founders and Only Shareholders and Directors

question 46

True/False

Tom and Jane are the founders and only shareholders and directors of Shinestone Corp,which carries on a business selling semi-precious stones.They want to declare and pay a dividend to themselves.They think that the corporation will be able to pay its debts after payment of the dividend and have received advice from their accountants that the market value of the assets of the corporation exceeds the total amount owed to creditors and the amount they paid into the corporation for shares.One of its creditors,Nova Bank,hears about their plan to pay a dividend and says that,in its view,the market value of the corporation's assets is not high enough to meet this test after the dividend is paid.Tom and Jane can still declare the dividend.

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Definitions:

Transportation

The action of moving goods or people from one place to another through various means such as roads, railways, air, or sea.

Suppliers

Entities that provide goods or services to other individuals or organizations, playing a critical role in the supply chain.

Felt Deprivation

A consumer’s perceived deficiency in their possessions or experiences, compared to a standard or to peers, which can influence buying behavior.

Needs

Refers to the essential requirements that individuals or organizations strive to fulfill, such as food, shelter, security, or business resources.