Which of the following statements about the benefits enjoyed by the owners of common stock is not correct?
A)Some classes of common stock can carry more votes than others.
B)Investors in a corporation are called stockholders.
C)Stockholders receive a share of the corporation's profits when distributed as dividends.
D)If the company ceases operations,stockholders share in any assets remaining before creditors have been paid.

Question

Quizplus · Accepted Answer

Residual claim means that,if the company ceases operations,stockholders share in any assets remaining after (rather than before)creditors have been paid.

Which of the Following Statements About the Benefits Enjoyed by the Owners