Which of the Following Is Least Likely to Result in a Constructive

question 82

Multiple Choice

Which of the following is least likely to result in a constructive dividend?

• A)an unreasonable salary paid to a shareholder
• B)a sale of a corporation's asset to a shareholder at fair market value
• C)a payment by a corporation of a shareholder's debts
• D)a payment by a corporation of a shareholder's personal expenses

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Definitions:

Long-Run Cost Function

A representation of how the total production cost of a firm changes with output in the long run, when all inputs can be varied.

Positive Output

The production of goods or services in an amount greater than zero, indicating activity or productivity in economic terms.

Total Cost

The aggregate of expenses related to the creation of goods or services, which includes fixed costs and variable costs.

Long-Run

In economics, a period in which all factors of production and costs are variable, allowing for full adjustment to change.