Questions: You paid 10,000 to buy 1% of the stock in a corporation that is now bankrupt. The company owes 10 million dollars to its creditors. As a result of the bankruptcy, you are responsible for paying 100,000 (or 10 million × 1%) of the amount owed to the creditors.

You paid 10,000 to buy 1% of the stock in a corporation that is now bankrupt. The company owes 10 million dollars to its creditors. As a result of the bankruptcy, you are responsible for paying 100,000 (or 10 million × 1%) of the amount owed to the creditors.
Transcript text: You paid $10,000 to buy $1 \%$ of the stock in a corporation that is now bankrupt. The company owes $\$ 10$ million dollars to its creditors. As a result of the bankruptcy, you are responsible for paying $\$ 100,000$ (or $\$ 10$ million $\times 1 \%$ ) of the amount owed to the creditors. True or False
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Solution

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Solution Steps

Step 1: Understand the given information
  • You paid \$10,000 to buy \(1\%\) of the stock in a corporation.
  • The company is now bankrupt and owes \$10 million to its creditors.
  • You are responsible for paying \(1\%\) of the \$10 million owed, which is \$100,000.
Step 2: Verify the calculation of your responsibility
  • The total debt is \$10,000,000.
  • Your responsibility is \(1\%\) of the total debt: \[ 1\% \times \$10,000,000 = 0.01 \times \$10,000,000 = \$100,000. \]
Step 3: Compare the calculated responsibility with the given statement
  • The statement claims that you are responsible for paying \$100,000.
  • The calculation confirms that this is correct.
Step 4: Determine if the statement is true or false
  • Since the calculation matches the statement, the statement is True.

Final Answer

True

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