Which of the Following Is a TRUE Statement

question 32

Multiple Choice

Which of the following is a TRUE statement?

• A) Stockholders are guaranteed annual dividends.
• B) Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates.
• C) Stockholders may authorize a business contract on behalf of the corporation.
• D) Stockholders may vote only if they physically attend the annual stockholders' meeting.

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Definitions:

Straight-line Depreciation

A method for dispersing the cost of a physical asset across its useful life in even annual allocations.

Discounted Payback

A capital budgeting method used to determine the profitability of an investment by calculating the time it takes for the present value of cash flows to cover the initial investment cost.

Annual Cash Flows

The total amount of money being transferred in and out of a business, considered on a yearly basis.

Required Rate

The minimum return an investor expects to achieve on an investment, considering its risk, also known as the hurdle rate or the required rate of return.