Question

Which of the following rights do common stockholders typically not have? Select one: A. Right to...

Which of the following rights do common stockholders typically not have?

Select one:

A. Right to vote and the right to elect the board of directors

B. Right to receive the final distribution of assets in liquidation after prior claims have been settled

C. Right to participate in additional issues of stock

D. Right to receive dividends at a predetermined rate

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Answer #1

Commons Shareholders are the real owners of the organization they have all right to elect the board of directors and they are at the time of liquidation of the organization first settled the payment of all pending dues and after this if any balance is available than only it is distributed to shareholder’s. They have also right to participate in additional issue of stocks as stock dividend and cash in form of dividends.

Dividend distributed to shareholders is on the basis of residual method only it is never on the basis of predetermined rate.

So as per the above,

Answer = Option D = Right to receive dividends at a predetermined rate

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