Which of the following statements is true of common stockholders?
A) They are legally entitled to annual dividends.
B) They are prone to a significant degree of risk.
C) Their average rate of return is lower than that of investors in other financial instruments.
D) They are safe from incurring capital losses.

Question

Quizplus · Accepted Answer

Common stockholders are prone to a significant degree of risk because the value of their shares can fluctuate significantly, and they are last in line to receive any remaining assets in the event of a company's liquidation.

Which of the Following Statements Is True of Common Stockholders