Holders of Common Stock Receive Certain Benefits,such as a Residual

question 115

Multiple Choice

Holders of common stock receive certain benefits,such as a residual claim,which:

• A)is the right of stockholders to be paid back their investment before anyone else if the company ceases operation.
• B)is the right to oversee management of the company.
• C)is the right to share in any remaining assets after creditors have been paid off,should the company cease operations.
• D)is the continuing right to receive a share of the company's profits in the form of dividends.

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Definitions:

Valid

A term applied to a contract that includes all four elements of a contract—agreement (offer and acceptance), consideration, contractual capacity, and legal object—and thus is enforceable.

Recognizable Beneficiaries

are individuals or entities that can clearly be identified as intended to benefit from a contract, trust, or legal arrangement, even if not directly party to it.

Agents of Beneficiaries

Individuals or entities acting on behalf of those who are to receive benefits or rights under a contract, will, or trust.

Birthday Present

A gift given to someone on the anniversary of their birth.