Which of the Following Guarantees Is Offered to Common Stock

question 59

Multiple Choice

Which of the following guarantees is offered to common stock investors?

• A)guaranteed to receive dividends
• B)guaranteed to receive capital gains
• C)guaranteed only to receive a refund of principal
• D)no guarantees of any form

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Definitions:

Par Value

A nominal value assigned to shares of stock by the issuing company, which may or may not reflect the shares' market value.

Excess of Par

The difference between the issue price of a stock and its par value, representing additional paid-in capital for the company.

Authorized Stock

The maximum number of shares a corporation is legally permitted to issue, as stated in its articles of incorporation.

Corporate Charter

A legal document issued by a government that establishes a corporation as a legal entity and outlines its rights and obligations.