What Is the Minimum Amount That Shareholders Should Expect to Receive

question 97

Multiple Choice

What is the minimum amount that shareholders should expect to receive in the event of a complete corporate liquidation?

• A)market value of equity
• B)book value of equity
• C)zero
• D)shareholders may be required to pay to be liquidated

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Definitions:

Consignment Shop

A retail store where people sell items and the owner of the shop gets a percentage of the sale price when the item is sold.

Noncumulative Preferred Stock

A type of preferred stock that does not entitle the shareholder to dividends that are omitted or not paid during any year.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders the right to vote on corporate matters and receive dividends.

Dividend Payment

A distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or stock.