Shareholders' Liability for Corporation Debts Is Generally Limited To

question 75

Multiple Choice

Shareholders' liability for corporation debts is generally limited to:

• A) the cost of their investment
• B) the market value of the shares
• C) the par value of the shares
• D) total shareholders' equity

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Definitions:

Creditors

Individuals or institutions that lend money or extend credit to others.

Liabilities

Liabilities are financial obligations or debts that a company owes to external parties, which must be settled over time through the transfer of economic benefits including money, goods, or services.

External Transaction

A financial event involving an exchange between the business and another entity outside of the company.