Which of the Following Statements Is Incorrect Regarding Common Stock

question 66

Multiple Choice

Which of the following statements is incorrect regarding common stock?

• A) Common stock is issued more narrowly than preferred stock.
• B) The common stockholders have voting rights.
• C) The common stockholders get paid after the creditors in the event the liquidation of the corporation.
• D) Common stock is the form of stock that most shareholders of a corporation own.
• E) The common stockholders elect the board of directors.

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Definitions:

Operating Income

Operating income refers to an organization's earnings before interest and taxes (EBIT), derived from its primary business activities excluding any earnings from investments and other non-operational activities.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the return divided by the cost of the investment.

Percentage

A ratio expressed as a fraction of 100.

Divisional Operating Income

Divisional operating income refers to the profit generated from the operations of a specific division within a company, excluding expenses and incomes that are not directly related to the division's operations.