All Distributions That Are Not Dividends Are a Return of Capital

question 7

True/False

All distributions that are not dividends are a return of capital and decrease the shareholder's basis.

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Definitions:

Short-term Creditor

A creditor that provides loans or credit to a business or individual with an expectation of repayment within a short period, typically less than a year.

Liquidity

The ability of an asset to be quickly converted into cash without losing its value.

Basic Earnings Per Share

A financial indicator that measures the net income generated per outstanding stock share.