Asked by Jalon Lipford on Jun 24, 2024
Verified
Which of the following is NOT a right of an owner of a share of common stock?
A) The right to share proportionately in dividends paid.
B) The right to share proportionately in remaining assets from a liquidation.
C) The right to vote for directors.
D) Preference over preferred shareholders in the payment of dividends.
E) The right to vote on stockholder matters of great importance.
Common Stock
A type of equity security that represents ownership in a corporation, with rights to vote on corporate policy and receive dividends.
Liquidation
The process of winding up a company's operations and distributing its assets to claimants, typically occurring when the company is insolvent.
Preferred Shareholders
Investors who own preferred shares in a company, which often grant them priority over common shareholders in dividend payments and asset liquidation.
- Understand the basic characteristics and rights associated with common and preferred stocks.
- Identify the different voting rights and how they impact shareholder influence in corporate decisions.
Verified Answer
GC
Geetanjali ChughJun 26, 2024
Final Answer :
D
Explanation :
Owners of common stock typically do not have preference over preferred shareholders in the payment of dividends. Preferred shareholders usually receive dividends before common shareholders and may have a fixed dividend rate.
Learning Objectives
- Understand the basic characteristics and rights associated with common and preferred stocks.
- Identify the different voting rights and how they impact shareholder influence in corporate decisions.