Which One of the Following Statements Is True About Ordinary

question 12

Multiple Choice

Which one of the following statements is true about ordinary shares?

• A)Ordinary shareholders have unlimited liability.
• B)Ordinary Shares are considered to have a fixed maturity.
• C)Owners of ordinary shares are guaranteed dividend payment by the company.
• D)Owners of ordinary shares have the lowest-priority claim on the company's assets in the event of insolvency.

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Definitions:

Marginal Cost

The expenditure required to produce one more unit of a particular product or service.

Monopolistically Competitive

A market structure characterized by many firms, differentiated products, and free entry and exit, allowing firms some control over price while still competing on quality, branding, and price.

Externality

A cost or benefit that affects a third party who did not choose to incur that cost or benefit.

Efficient Scale

The level of production at which a firm's average total costs are minimized.