Which of the Following Statements Is Correct with Respect to the Law

question 15

Multiple Choice

Which of the following statements is correct with respect to the law of consideration?

• A) The amount of consideration to be paid in a contract must be reasonable (that is, fair) from the point of view of each party.
• B) Without consideration or a seal, there can be no contract.
• C) Consideration must have some value but need not be specific.
• D) For a contract to be binding, something valuable must have changed hands. This consideration may have been paid before the agreement (past consideration) or at the time of the agreement (present consideration), but future consideration is no consideration.
• E) Consideration need not be specific, just so both parties got something out of the deal.

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Definitions:

Treasury Stock

Treasury stock consists of shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price, providing insight into the income generated from an investment.

Cash Dividends

Payments made by a corporation to its shareholders, typically from profits, in the form of cash.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing shareholders' equity and outstanding shares.