1 pts Question 4 [p 416-424] Most of the following statements are true regarding corporations. Which statement is FALSE regarding corporations? Corporations are legally classified as "persons" so they pay taxes on income, just as do real people. When stockholders receive dividends from the corporation, they may be taxed on those dividends (unless they belong to the economic elite who manage to call it "carried interest rather than dividends). Thus. corporations are said to be subject to "double-taxation." Corporate stock is easily transferred to new shareholders. Average individuals who own stock in the company can be sued as a result of the actions of top management o If a corporation has only one class of stock it is called common stock Question 5 0.5 pts (p 423-431) No corporation guarantees it will pay a dividend, even though it may have paid a dividend every quarter for the past 70 years. The Board of Directors meets and decides whether to issue a dividend. Do not guess. Read the text. A company has 10,000 shares of 7% preferred stock issued and outstanding. The preferred stock has a par value of $100 per share. This means that: of the Board of Directors declares a dividend. the potential dividend will be $7 for each preferred share. The preferred shares are guaranteed to increase in market value at least 7% per year The firm is obligated to buy-back the preferred shares at a 7% markup above the par value