The Owners of a Corporation Are Its Shareholders

question 11

Multiple Choice

The owners of a corporation are its shareholders.If a corporation has only one class of shares,they typically are labeled common shares.Each of the following are ownership rights held by common shareholders,unless specifically withheld by agreement,except:

• A)The right to vote on policy issues.
• B)The right to share in profits when dividends are declared (in proportion to the percentage of shares owned by the shareholder).
• C)The right to dividends equal to a stated rate time par value (if dividends are paid).
• D)The right to share in the distribution of any assets remaining at liquidation after other claims are satisfied.

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Definitions:

Shutting Down

A short-term decision by a firm to halt production due to market conditions, not necessarily implying going out of business.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced; it varies with production levels.

Average Fixed Cost

Fixed cost divided by the quantity of output

Perfectly Competitive

A market structure characterized by many sellers and buyers, homogeneous products, no barriers to entry or exit, and perfect information, leading to optimal allocation of resources.