Kappa Corp and Lambda Corp Are Identical Except That Kappa

question 91

Multiple Choice

Kappa Corp and Lambda Corp are identical except that Kappa pays a dividend of $5 per share,while Lambda pays no dividend and uses the cash to repurchase stock.Peter Berngarten owns 100 shares of Kappa.How could he raise the same amount of spending money if instead he owned 100 shares of Lambda?

• A) He could sell $500 worth of shares of Lambda each year.
• B) He couldn't; he could not be sure of the price at which he could sell Lambda stock.
• C) He could sell 5 shares of Lambda each year.
• D) He could borrow against his holding of Lambda stock.

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Definitions:

Abolitionist Ranks

Individuals and groups actively involved in the movement to end slavery and the slave trade throughout the 18th and 19th centuries.

Kansas-Nebraska Act

1854 law sponsored by Illinois senator Stephen A. Douglas to allow settlers in newly organized territories north of the Missouri border to decide the slavery issue for themselves; fury over the resulting repeal of the Missouri Compromise of 1820 led to violence in Kansas and to the formation of the Republican Party.

Republican Party

A major political party in the United States, typically associated with conservative and right-leaning policies, emphasizing limited government and individual freedoms.

Mexican War

A conflict between the United States and Mexico from 1846 to 1848, resulting in the U.S. acquiring territories in what is now the southwestern part of the country.