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At maturity, corporations must repay stockholders the money they invested in the company.

(True / False)

User ZLMN
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1 Answer

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Final answer:

Corporations are not required to repay stockholders their initial investment; stockholders earn returns through dividends or capital gains.

Step-by-step explanation:

The statement that corporations must repay stockholders the money they invested in the company at maturity is False. When a company issues stock, it is selling ownership shares in the company to investors. Stockholders can earn a return on their investment either through dividends or by selling their shares for a higher price than they paid (capital gains). There is no obligation for a corporation to repay the initial investment to stockholders. If a company issues bonds or borrows from a bank, it must make regular interest payments regardless of its income, but with stock, no such scheduled payments are required.

User Wickethewok
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