To Help Avoid the Thin Capitalization Problem, It Is Advisable

question 95

True/False

To help avoid the thin capitalization problem, it is advisable to make the repayment of the debt contingent upon the corporation's earnings.

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Definitions:

Subsidiary's Shareholders

Subsidiary's Shareholders are individuals or entities that own shares or stock in a subsidiary company, which is a company controlled by another business, known as the parent company.

Approval Vote

A voting system where participants can vote for as many options as they approve of, rather than selecting just one.

Shareholders

Individuals or entities that own one or more shares of stock in a public or private corporation, granting them certain rights and potential profits.

Merger

The combination of two or more companies into a single entity, where one survives and the others cease to exist independently, often to achieve greater efficiency and market share.