Choosing a Legal Entity for a Firm Is a One-Time

question 60

True/False

Choosing a legal entity for a firm is a one-time event. Once a form of legal entity has been chosen, it cannot be changed.

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Definitions:

Dividends Payable

A liability account on a company’s balance sheet indicating the amount owed to shareholders in the form of dividends to be paid out.

Stock Split

A corporate action that increases the number of a corporation's outstanding shares by dividing each share, which may lower the share price.

Par Value

The nominal or face value of a stock or bond, as stated in the corporate charter or on the certificate.

Stock Dividend

Stock Dividend involves distributing additional shares of a company's stock to its shareholders as a form of dividend.