Which One of the Following Statements Is Correct

question 31

Multiple Choice

Which one of the following statements is correct?

• A)The majority of firms in the U.S. are structured as corporations.
• B)Corporate profits are taxable income to the shareholders when earned.
• C)Corporations can raise large amounts of capital generally easier than partnerships can.
• D)Stockholders face no potential losses related to their corporate investment.
• E)Corporate shareholders elect the corporate president.

---

Definitions:

Promising Young Companies

Emerging businesses that show potential for significant growth and success in their industry.

Mezzanine Financing

A hybrid form of capital typically used in late-stage financing composed of debt and equity, ranking between senior debt and equity in terms of claim on assets.

Principle Amount

The original sum of money borrowed in a loan or the initial amount of investment before interest or profit.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation, representing the residual value to shareholders after debts and liabilities have been settled.