Firms Are Usually Prohibited by State Law from Distributing

question 126

Multiple Choice

Firms are usually prohibited by state law from distributing

• A) retained earnings as dividends.
• B) paid-in capital as dividends.
• C) dividends in a year the firm has a net loss.
• D) assets as dividends.

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Definitions:

Government Programs

Initiatives launched by the government aimed at achieving specific policy outcomes, ranging from social welfare to economic stimulation.

Surplus

An excess of supply over demand, leading to a situation where goods and services exceed their consumption or utilization.

Rent Control

Government policies or laws that limit the amount landlords can charge for renting out a property, intended to make housing more affordable.

Demand Increase

This occurs when there is a rise in the quantity of a product or service that consumers are willing and able to purchase at a given price, often due to factors like increased income, changes in tastes, or population growth.