A Corporation May Purchase Its Own Shares Only Out of Earned

question 62

True/False

A corporation may purchase its own shares only out of earned surplus unless the articles of incorporation or the shareholders permit purchase out of capital surplus.

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Definitions:

Employer Discretion

The latitude granted to employers in making decisions regarding hiring, salary levels, promotions, and employee termination.

Wages

Remuneration given to laborers for their efforts, usually measured in terms of hours worked, daily rates, or per unit of output.

Workers

Individuals engaged in a particular task or activity, especially in relation to their employment or contribution to the economy.

Marginal Product

The extra output obtained by utilizing an additional unit of a production input.