Question: Since initial contributed capital theoretically belongs to the stockholders, why are there legal restrictions on paying out the funds to the stockholders?

Since initial contributed capital theoretically belongs to the stockholders, why are there legal restrictions on paying out the funds to the stockholders?

Step by Step Solution

3.42 Rating (177 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Creditors have extended credit on the assumption that a given capital ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

341-B-C-F-D-P (87).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!