SIE practice questioneasyCommon Stock
Which of the following is true regarding ownership rights of common stockholders?
- AThey have no voting rights.✓ Correct answer
- BThey have a fixed dividend rate.
- CThey have residual claim on assets after creditors and preferred shareholders.
- DThey are paid before bondholders in liquidation.
Explanation
Why A — They have no voting rights.
Common stockholders have residual claim on assets after all debts and preferred shareholders are paid. Answer B is incorrect because only preferred stock has a fixed dividend; C is wrong as common stockholders do vote; D is incorrect as bondholders are paid first.
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