Which of the following is not a right possessed by common stockholders of a corporation?
a. the right to vote in the election of the board of directors
b. the right to receive a minimum amount of dividends
c. the right to sell their stock to anyone they choose
d. the right to share in assets upon liquidation
Your answer is D.
Here is some information regarding rights of Common Shareholders:
egal Rights of Common Stockholders
Common stockholders have the following legal rights:
* The right to receive stock certificates as evidence of ownership.
* The right to vote at stockholders' meetings.
* The right to receive any declared dividends, and to sell the stock.
* The right to information and to receive financial reports about the company.
* The right to buy newly issued shares of stock by the company before the shares are sold to the public, so that current owners can maintain their proportionate interest in the company, if they so choose.
Common stockholders, unlike preferred stockholders, have the right to vote for the corporate board of directors, who, in turn, have complete control of the company. Each stock gives the stockholder one vote for each director position that is up for voting, but that vote may be apportioned in 2 different ways. Statutory voting allows using all votes for each of the vacancies for the board of directors; cumulative voting increases the number of votes that a stockholder can use for a ...
2. (a) Your friend Dick Wasson cannot understand how the characteristic of corporation management is both an advantage and a disadvantage. Clarify this problem for Dick.
(b) Identify and explain two other disadvantages of a corporation.
4. What are the basic ownership rights of common stockholders in the absence of restrictive provisions?
9. What factors help determine the market value of stock?
23. The board of directors is considering a stock split or a stock dividend. They understand that total stockholders' equity will remain the same under either action. However, they are not sure of the different effects of the two types of actions on other aspects of stockholders' equity.
Explain the differences to the directors.
32. What is the cost of an investment in stock?
34. (a) When should a long-term investment in common stock be accounted for by the equity method? (b) When is revenue recognized under this method?
44. What is the proper statement presentation of the account Unrealized Loss-Equity?View Full Posting Details