When a business is organized as a corporation, which of the following statements is true?

a. Stockholders are liable for the debts of the business in proportion to their percentage ownership of capital stock.

b. Stockholders do not have to pay personal income taxes on dividends received, because the corporation is subject to income taxes on its earnings.

c. Fluctuations in the market value of outstanding shares of capital stock do not affect the amount of stockholders' equity shown in the balance sheet.

d. Each stockholder has the right to bind the corporation to contracts and to make other managerial decisions.