Which of the Following Is Not a Characteristic of the Corporate

question 53

Multiple Choice

Which of the following is not a characteristic of the corporate form of organization?

• A)The owners of a corporation cannot lose more than the amount of their investment.
• B)Shares of stock in a corporation are more readily transferable than is an interest in a partnership.
• C)Stockholders have authority to decide by majority vote the amount of dividends to be paid.
• D)The corporation is a very efficient vehicle for obtaining large amounts of capital required for large-scale production.

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Definitions:

Debt-to-Equity Ratio

A measure used to evaluate a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.

Financial Statements

Documents that provide an overview of a company's financial condition, including income statements, balance sheets, and statements of cash flows.

Industry Comparison

The process of comparing the statistical measures, performance, and strategies of one company against other companies within the same sector.

Better Investment

A term used to describe an investment option that is considered to offer a higher potential return compared to another option.