Common stock is a ___________________ in the corporation it is issued by.

Question

BlackTom AI · Accepted Answer

The question asks about the nature of common stock in the corporation it is issued by.
Option 1: residual interest. This is the standard characterization of common stock: shareholders own a residual claim on assets after all debts and obligations have been satisfied, and they participate in profits through dividends and capital appreciation. The description aligns with equity ownership in a corporation.
Option 2: senior obligation. This would describe debt instruments like bonds or loans, where creditors have priority over equity holders in claims on assets and earnings. Common stock does not have this senior, priority status; it is not a debt obligation.
Option 3: liability. A liability is a present obligation arising from past events, which would require the entity to outflow resources. Common stock represents ownership interest, not an obligation the company owes, so categorizing it as a liability is inaccurate.
Option 4: discounted instrument. The phrase 'discounted instrument' typically refers to debt securities or instruments issued at a discount or with discounted features. Common stock is not issued as a discounted instrument in the same sense, and equity securities do not function as debt instruments with discount terms. Hence this option mischaracterizes the nature of stock issuance.
In summary, the description that best fits common stock is that it represents a residual interest in the corporation, distinguishing equity from liabilities and debt instruments.

37:533:360:90 HRM FINANCIAL DEC. Module 9 Quiz - Know Your Stocks and Bonds

Common stock is a ___________________ in the corporation it is issued by.

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37:533:360:90 HRM FINANCIAL DEC. Module 9 Quiz - Know Your Stocks and Bonds

Common stock is a ___________________ in the corporation it is issued by.

查看解析

登录即可查看完整答案

类似问题

If you believe that a firm will grow rapidly in the future, you should buy its

If you wish to have a direct voice in the running of a company, you should purchase

Part 1Common stock is a vehicle for selling ownership and another way to raise money for​ operations, expansion, or other business needs. Part 1 True False

Which of the following is not true about common stock?

Which of the following is NOT true about common stock?

Which of the following is not a characteristic of common stock?

Which one of the following types of stock is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings?

更多留学生实用工具

希望你的学习变得更简单

Part 1Common stock is a vehicle for selling ownership and another way to raise money for operations, expansion, or other business needs. Part 1 True False