If You Want a Say in the Management of a Corporation

question 77

Multiple Choice

If you want a say in the management of a corporation, you should buy

• A) common stock.
• B) preferred stock.
• C) bonds.
• D) either bonds or preferred stock.

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Definitions:

Rate of Return

The positive or negative financial outcome of an investment over a specific period, expressed in terms of a percentage of the cost of investment.

EPS

EPS stands for Earnings Per Share, a financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock.

Marginal Tax Bracket

The tax rate that applies to the last dollar of the taxpayer's income, indicating additional taxes on future earnings.

Annual Dividends

Annual dividends refer to the total dividend payments a company makes to its shareholders in a given fiscal year, representing a share of the profits distributed.