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Series 7 practice questioneasyEquity Securities — Common Stock

Which of the following rights is most commonly associated with common stockholders?

  1. AThe right to vote on corporate matters such as board elections✓ Correct answer
  2. BThe right to receive a fixed dividend each quarter
  3. CThe right to redeem shares at any time for the initial purchase price
  4. DThe right to convert shares into bonds at par value
Explanation

Why A — The right to vote on corporate matters such as board elections

Common stockholders have the right to vote on major corporate matters, including the election of the board of directors. Unlike preferred stockholders, common stockholders do not have a guaranteed fixed dividend, and shares are not redeemable at a fixed price.

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