A Disadvantage of Corporations Is That an Owner Must Get

question 311

True/False

A disadvantage of corporations is that an owner must get the approval of all other owners before selling his or her interest in the firm to another investor.

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Definitions:

Stock Dividend

A dividend payment made in the form of additional shares of the company's stock rather than cash.

Par Value

The nominal or face value of a bond, stock, or coupon as indicated on a certificate or instrument.

Common Stock Dividends Distributable

A liability recognized on a company's balance sheet for dividends declared on common stock that have not yet been paid to shareholders.

Income Statements

Financial statements that show a company's revenue, expenses, and profit over a specific period.