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

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

Option 1: has no maturity
- This is a true characteristic of common stock. Unlike bonds or debt instruments, common stock does not have a set maturity date. Investors hold shares for an indefinite period, hoping for appreciation and possible dividends.

Option 2: pays fixed dividends
- This is not a characteristic of common stock. Common stock dividends are variable and depend on company profits and board decisions. Paying fixed dividends is more typical of preferred stock, which often has a set dividend rate.

Option 3: has the lowest priority to claim the asset in case of bankruptcy
- This is a true characteristic of common stock. In liquidation, common shareholders are last in line after creditors and preferred shareholders, meaning they have the lowest claim on remaining assets.

Option 4: has voting rights
- This is also a true characteristic. Most common shares carry voting rights, allowing holders to vote on corporate matters such as the election of directors and other major policies.

Summary: Among the options, the statement that does not describe a characteristic of common stock is that it pays fixed dividends, since fixed dividends are associated with preferred stock rather than common stock.

MSB-250-300-002 Topic 7 Quiz

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

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MSB-250-300-002 Topic 7 Quiz

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

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?

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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?

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