Which of the Following Is False Regarding the Issue of Stock

question 140

Multiple Choice

Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

• A)The payment of dividends is at the discretion of the board of directors.
• B)The payment of interest on bonds payable is required by law.
• C)Interest accrues,whereas dividends do not accrue.
• D)The declaration of dividends reduces the amount of income taxes the corporation must pay.

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Definitions:

Government Budget

A financial statement presenting the government's projected revenue and expenditure for a specific period.

National Saving

The total amount of savings generated within a country, which includes both private savings by households and businesses, and public savings from government budgets.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are managed by professionals.

Investment Charges

Fees and expenses associated with investing in various types of investment vehicles, like mutual funds or stocks.