Which of the Following Is a TRUE Statement About No-Par

question 14

Multiple Choice

Which of the following is a TRUE statement about no-par stock?

• A) No-par stock has zero value.
• B) No-par stock has been purchased by the corporation for investment purposes.
• C) No-par stock is a form of common stock that does not carry par value.
• D) No-par stock is a form of preferred stock without voting rights.

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Definitions:

English Parliament

The legislative body of the United Kingdom, responsible for making and passing laws.

Act for the Prevention of Frauds and Perjuries

Historical legislation requiring certain contracts to be in writing and signed to prevent fraudulent claims and perjury.

Main-Purpose Rule

A legal principle holding that if the main purpose of a guarantor's promise to pay another's debt is to serve the guarantor's own interests, the promise does not need to be in writing to be enforceable.

Secondary Obligation

An obligation that arises only after a primary obligation has not been fulfilled, often seen in guarantor or surety arrangements.