The Model Business Corporation Act

question 92

Multiple Choice

The Model Business Corporation Act:

• A)Uses the word "common" and "preferred" in describing distinguishing characteristics of stock.
• B)Defines legal capital as the amount of net assets not available for distribution to shareholders.
• C)Provides guidance for choosing an appropriate par value for new issues of stock.
• D)Has affected the laws of most states.

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Definitions:

Compounding

Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.

Time Period

A length or duration of time during which events occur or conditions exist, often used in financial contexts to specify the term of analysis or investment.

Present Value

Present value denotes the current valuation of a prospective sum of money or sequence of cash flows, based on a predefined rate of return.