Respuesta :
Answer: Will loose their investment and nothing else.
Explanation: Byrce is a stock holder in the market investment which is a C corporation. The C corporation if goes bankrupt, it will first sell the assets and pay off the debt holders and then the shareholders as corporation are a separate entity with limited liability. Byrce and other stock holders have invested in the company through the stock, hence will only loose their money invested if the company goes bankrupt and could not repay the money.
The stockholders will lose their invested capital in case of bankruptcy.
Further Explanation:
C corporation:
C corporation refers to the type of corporation where the owners or the shareholders of the taxed individually. C corporation is also liable for the payment of the tax on its income. The profit resulted from the C corporation is subject to double taxation. First, the corporation has to pay the tax on the income, and then the shareholders have to pay the tax on their income from the corporation.
The liability of the investors in C corporation is limited. The maximum amount that the shareholders can incur is their invested capital.
Consequences to the shareholders in case of bankruptcy:
In case of bankruptcy, the shareholder will lose their invested capital. In case of bankruptcy, the management is liable for the payment of the outside credit such as loan, creditors, debenture holder. After the payment of the outside credit, the management should pay to the preference shareholders. If any capital left after the payment of the preference shareholder, the management should pay the remaining funds to the common stockholders of the company.
In the given case, the market investments are likely to owe money to its creditors. Therefore, the company does not have funds for the payment of the common stockholders’ capital.
Thus, the stockholders will lose their invested capital in case of bankruptcy.
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Answer Details:
Grade: Senior school
Chapter: S corporation Â
Subject: Taxation
Keywords: Bryce, stockholder, market, investments, c, corporation, market, investments, recently, court, decision, result, decision, forced, bankruptcy, damages, awarded, great, that, even, sold, proceeds, pay, debts, market, investments.
