Which of the Following Statements Is Correct

question 168

Multiple Choice

Which of the following statements is correct?

• A) Par value shares are prohibited under the CBCA.
• B) Legal capital is that which would be distributed back to shareholders in the event of liquidation.
• C) Contributed Capital is the amount on which dividend payments should be based.
• D) Contributed Capital represents the proceeds from a share issue in jurisdictions where par values are allowed.

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Definitions:

Perfectly Elastic

A situation in which the quantity demanded or supplied changes infinitely in response to any change in price, represented by a horizontal demand or supply curve.

Input Prices

The cost of resources used in the production process, including labor, materials, and capital.

Price Ceilings

Legal maximum prices set for particular goods and services, intended to protect consumers from very high prices.

Consumer Surplus

The variance between the actual cost paid by consumers and the maximum amount they're prepared to pay for a good or service.