Depending on Its Constitution and the Terms of the Prospectus

question 37

Multiple Choice

Depending on its constitution and the terms of the prospectus, a company that receives more than the required number of applications for its shares will normally:

• A) issue the additional shares.
• B) retain the excess in satisfaction of future calls.
• C) refund the excess to unsuccessful applicants.
• D) refund the excess to unsuccessful applicants or retain the excess in satisfaction of future calls.

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Definitions:

Corporate Income Taxes

Taxes imposed on the income or profit earned by corporations and are calculated based on the tax laws of the country in which the corporation is located.

Canada Revenue Agency

The federal agency responsible for administering tax laws and various social and economic benefit and incentive programs delivered through the tax system in Canada.

Tax Exempt

Describes income, property, or transactions that are legally free from tax liability.

Common Equity

The amount of ownership in a corporation that is held by common shareholders, represented by the value of common stock plus retained earnings.