Which of the Following Is Not One of the Standards

question 68

Multiple Choice

Which of the following is not one of the standards that a business must meet to qualify for status as a subchapter S corporation?

• A) The business cannot be a subsidiary of another corporation.
• B) All shareholders must agree to have the corporation formed as a subchapter S corporation.
• C) It can have no more than 75 members (husbands and wives count as one member).
• D) It can have only one class of stock issued and outstanding.
• E) The shareholders must be U.S. citizens.

---

Definitions:

Option To Wait

A choice or right, but not the obligation, to delay a business decision or investment, recognizing the value of flexibility in decision-making under uncertain conditions.

Discount Rate

The interest rate used to discount future cash flows to their present values, providing a measure of the time value of money.

Cash Inflows

Money that enters a business from various sources, contributing to its revenue or capital.

Required Rate

The minimum expected rate of return on an investment, setting a benchmark for acceptable investment performance.