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:

Discount Rate

The discount rate that is employed during discounted cash flow evaluation to ascertain the present valuation of future expected cash flows.

Simple Rate of Return

A financial metric that calculates the gain or loss of an investment over a specific period as a percentage of the investment's initial cost.

Cash Outflows

Payments or expenditures made by a business or individual, resulting in a decrease in cash balance.

Useful Life

The estimated duration of time that an asset is expected to be useful in operations, contributing to the company's income generation.