Which ONE of the Following Statements Is True About Common

question 22

Multiple Choice

Which ONE of the following statements is true about common stock?

• A) Common stock is considered to have a fixed maturity.
• B) Owners of common stock are guaranteed dividend payment by the firm.
• C) Owners of common stock have the lowest-priority claim on the firm's assets in the event of bankruptcy.
• D) Common-stock holders have unlimited liability.

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Definitions:

Gross Income

The total income earned by an individual or a business before any deductions or taxes are applied.

Form 1040EZ

A simplified tax form for individual federal income tax returns filed with the IRS, designed for taxpayers with basic tax situations.

Tax Tables

Charts provided by the IRS that display tax rates and thresholds for different filing statuses and income levels to calculate tax liability.

Sixteenth Amendment

An amendment to the U.S. Constitution that allows Congress to levy an income tax without apportioning it among the states or basing it on the U.S. Census.