Which of the Following Is NOT a Method for a Firm

question 44

Multiple Choice

Which of the following is NOT a method for a firm to payout excess cash to its shareholders?

• A)pay a dividend with the excess cash
• B)repurchase shares
• C)issue new shares and pay a high dividend
• D)issue new shares

---

Definitions:

Double Taxation

The imposition of taxes on the same income, asset, or financial transaction at two different levels, such as corporate earnings and shareholder dividends.

Proprietorship

A business owned and operated by an individual, where the owner is personally responsible for the business's debts.

Limited Liability

Limited liability is a legal structure that restricts investors' or owners' personal responsibility for a company’s debts and losses to the extent of their investment.

Potential Sales

The estimated total sales revenue that a company could theoretically achieve in a market under ideal conditions.