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:

Years to Maturity

The remaining time until a financial instrument, such as a bond, reaches its maturity date and the principal must be repaid.

Convertible Bond Issue

A convertible bond issue is a type of debt security that can be converted into a predetermined number of the issuer's equity shares at certain times during its life, according to specified conditions.

Fixed Rate Coupon

A bond feature that pays the holder a fixed interest rate over the life of the bond, leading to predictable interest income.

Common Shares

Equity securities that represent ownership interest in a company, giving shareholders voting rights and a share in the company's profits through dividends.