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Which of the Following Statements Best Describes How Corporate Law

Question 38

Multiple Choice

Which of the following statements best describes how corporate law protects creditors?


A) Corporate law does not protect creditors.
B) Corporate law rules restricting the payment of dividends to shareholders unless certain financial tests are satisfied protect creditors by keeping money in the corporation when the corporation requires that money to pay debt.
C) Directors have a duty to protect the interests of creditors.
D) Creditors can enforce restrictions on the ability of the corporation to pay dividends to shareholders.
E) Creditors must protect themselves by contract.

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