SIE practice questionmediumCommon Stock
Common stockholders have which of the following rights?
- APriority over bondholders for interest payments
- BGuaranteed annual dividends
- CResidual claim on assets in event of liquidation✓ Correct answer
- DFixed return on investment
Explanation
Why C — Residual claim on assets in event of liquidation
Common stockholders claim assets only after debts and preferred stock are paid. They lack dividend guarantees, interest payment priority, or fixed returns.
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