Asked by Kylee Woodring on Jun 04, 2024
Verified
If a shareholder receives watered stock, they cannot be held personally liable.
Watered Stock
Stock that is issued to individuals below its fair market value.
- Gain insight into the various responsibilities and positions held in corporate management, pinpointing the differences between shareholders, directors, and officers.
Verified Answer
ES
elina sanchez alonsoJun 10, 2024
Final Answer :
False
Explanation :
Watered stock refers to shares issued by a company for a value much greater than the asset or cash value it receives, which can lead to situations where shareholders might be held personally liable to creditors for the difference if the company cannot cover its debts.
Learning Objectives
- Gain insight into the various responsibilities and positions held in corporate management, pinpointing the differences between shareholders, directors, and officers.
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