Which of the Following Statements About Par Value Is FALSE

question 124

Multiple Choice

Which of the following statements about par value is FALSE?

• A)The par value per share is used to determine the dividends per share for common stock.
• B)The stated value of a stock is conceptually similar to the par value of a stock.
• C)It is generally illegal for a corporation to sell an original issue of common stock below the par value.
• D)The par value is the maximum legal liability of stockholders if the corporation cannot pay its debts.

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Definitions:

Locked-rotor Current

A rephrased definition for Locked-rotor Starting Current: The initial surge of electrical current an electric motor experiences when powered on, but the rotor is stationary, leading to a higher than normal current draw.

Design Code Letter

A letter or set of letters found on an electric motor's nameplate that indicates the motor's locked rotor kVA per horsepower, crucial for understanding start-up power demands.

Shaft Diameters

The measurement across the central part of a shaft, indicating its thickness or width.

Setscrew

A type of screw often used to secure an object within or against another object, typically without the use of a nut.