In spite of the fact that a corporation does not meet the solvency test,it can
A)buy back shares.
B)pay wages to employees.
C)pay dividends.
D)make loans to directors.
E)none of the above

Question

Quizplus · Accepted Answer

Even if a corporation does not meet the solvency test, it can still pay wages to its employees as it is necessary for the ongoing operations of the business. However, it cannot buy back shares, pay dividends or make loans to directors as these activities require the corporation to have sufficient assets to meet its liabilities. Therefore, the correct choice is B.

In Spite of the Fact That a Corporation Does Not