A corporation cannot pay any dividends to stockholders which would reduce the company's net worth per share below the par value of its stock.

Name: A corporation cannot pay any dividends to stockholders which would reduce the company's net worth per share below the par value of its stock.
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Question

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Corporations are generally prohibited from paying dividends that would reduce the net worth per share below the par value, as it protects creditors and maintains the legal capital.

A Corporation Cannot Pay Any Dividends to Stockholders Which Would