Stockholders that do not get benefits even if company's earnings grow are classified as_____________?
Correct answer: A. Preferred stockholders
- A. Preferred stockholders
- B. Common stockholders
- C. Hybrid stockholders
- D. Debt holders
Explanation
Preferred stockholders normally receive a fixed dividend, so they do not directly share in additional earnings growth. Common stockholders benefit most from increased profits through higher dividends or share value.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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