The type of corporate ownership that has first claim on profits and assets is called a
A) bondholder.
B) preferred stockholder.
C) creditor.
D) common stockholder.
E) board of directors.

Question

Quizplus · Accepted Answer

Preferred stockholders have priority over common stockholders in terms of receiving dividends and receiving assets in the event of liquidation. Bondholders and creditors are debt holders and do not have ownership in the company. The board of directors is a group of individuals elected by shareholders to oversee management of the company but does not have ownership rights. Common stockholders have ownership in the company but do not have priority over preferred stockholders in terms of profits and assets.

The Type of Corporate Ownership That Has First Claim on Profits