The residual claims, limited rights, limited liability and dividend payments on discrete basis are considered as ____________?
Correct answer: C. characteristics of common stock
- A. characteristics of fundamental stock
- B. characteristics of claimed stock
- C. characteristics of common stock
- D. characteristics of preferred stock
Explanation
Common stockholders have residual claims after creditors and preferred shareholders, limited liability, and dividends that are not guaranteed and may be paid irregularly. These features distinguish common stock from preferred stock.
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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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