In the Event of Liquidation, Preferred Shareholders

question 41

Multiple Choice

In the event of liquidation, preferred shareholders:

• A)are guaranteed to get their investment back in full.
• B)have first claim on remaining corporate assets after debts are paid.
• C)may sell their shares for higher amounts than common stock.
• D)may retain their proportionate share of voting rights.

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Definitions:

Demand Curve

A graph showing how the quantity demanded of a good or service varies with its price.

Elastic

A characteristic of a good or service where its demand or supply changes significantly when its price changes.

Average Costs

The total costs of production (fixed and variable) divided by the total quantity of output produced.

Central Planning Model

A system of economy where all choices regarding the creation and use of goods and services are made by the government.