In spite of the fact that a corporation does not meet the solvency test, it can:
A) pay wages to employees
B) pay dividends
C) buy back shares
D) make loans to directors
E) it can do none of the above

Question

Quizplus · Accepted Answer

Even if a corporation does not meet the solvency test, it can still pay wages to its employees as it is considered a priority expense. However, it cannot pay dividends, buy back shares, or make loans to directors until it meets the solvency test requirements.

In Spite of the Fact That a Corporation Does Not