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SIE practice questioneasyCommon Stock — Voting Rights

Which of the following rights is typically associated with common stock ownership?

  1. APriority claim over bondholders in liquidation
  2. BThe right to vote on corporate matters such as the board of directors✓ Correct answer
  3. CGuaranteed fixed dividend payments
  4. DThe right to convert shares into corporate bonds
Explanation

Why B — The right to vote on corporate matters such as the board of directors

Common stockholders have the right to vote on corporate matters, including electing the board of directors. Common stock dividends are NOT guaranteed (A is wrong). In liquidation, bondholders have priority over common stockholders (C is wrong). There is no inherent conversion right into bonds (D is wrong).

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