All states impose the equity insolvency test,which prohibits the payment of any dividend or other distribution when the corporation is insolvent or would become so through the payment of the dividend or distribution.

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This statement is true. All states have an equity insolvency test, which prohibits corporations from paying dividends or other distributions when the corporation is insolvent or would become so through the payment of the dividend or distribution. This test is designed to protect the rights of creditors and ensure that they receive priority in the event of a company's insolvency.

All States Impose the Equity Insolvency Test,which Prohibits the Payment