What Right Does a Share Confer on Its Owner in Regard

question 57

Multiple Choice

What right does a share confer on its owner in regard to an interest in the corporation?

• A) Right to participate in control.
• B) Right to participate in earnings of the corporation.
• C) Right to participate in residual assets of the corporation upon dissolution.
• D) All of these are conferred.

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Definitions:

Opportunity Cost

The cost associated with not choosing the next best alternative when making a decision, representing the benefits one could have received by taking an alternative action.

Alternative Use

The value or potential benefit that is foregone as a result of using an asset or resource in a particular way instead of another possible way.

Sunk Costs

are past expenses that have already been incurred and cannot be recovered or changed, and thus should not affect future business decisions.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made, not incurred in the absence of the decision.