Asked by Anika Singh on Jun 03, 2024
Verified
When shares are involved, even preferred shares, there is no legal obligation to pay dividends, but a failure to repay ________ constitutes a breach of the corporation's legal obligation.
A) debts
B) assets
C) bondholders
D) shareholders
E) par-value shares
Preferred Shares
Shares giving the shareholder preference over other classes of shares; that preference often pertains to the payment of dividends.
Legal Obligation
A legal obligation is a requirement imposed by law, where a person is required to perform or refrain from performing a certain action.
Dividends
Payments made by a corporation to its shareholders, usually derived from the company's profits.
- Understand the legal obligations and liabilities of corporations regarding dividends, debts, and breaches.
Verified Answer
Learning Objectives
- Understand the legal obligations and liabilities of corporations regarding dividends, debts, and breaches.
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