Under the Revised MBCA,if There Are Business Debts Following a Defective

question 36

Multiple Choice

Under the revised MBCA,if there are business debts following a defective incorporation,liability for the debts will be imposed upon:

• A)all purported shareholders who acted as if a corporation had been formed.
• B)promoters,managers,or purported shareholders who only participated in management and policy decisions in the business.
• C)all shareholders and directors who participated actively or inactively.
• D)promoters,managers,and shareholders who participated in management and policy decisions,and also knew of the defective incorporation.

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Definitions:

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.

Cutoff Rate

A specific point or standard used for decision-making, often concerning the minimum accepted return on investment.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.