Which of the Following Is Not True Regarding Common Stock

question 28

Multiple Choice

Which of the following is not true regarding common stock?

• A) Common stock has no maturity.
• B) New issues of common stock may dilute existing shareholder equity.
• C) Common stock is a permanent source of funds.
• D) Dividends paid are not tax-deductible.
• E) Dividends are considered a fixed charge that must be paid.

---

Definitions:

Communication Cycle

The process involving a series of steps by which a message is sent from one individual, processed by another, and potentially feedback is given, ensuring mutual understanding.

Decoding

The process of understanding a message; the receiver interprets the message and translates it into meaningful information.

Ideation

The creative process of generating, developing, and communicating new ideas, whether abstract or concrete.

Business Travel

The act of traveling for work or professional purposes, often involving trips to different cities or countries to attend meetings, conferences, or conduct business operations.