A parent might attempt to resolve a transfer of ownership by giving active children in the firm's management _____ stock and giving nonactive children _____ stock.
A) distributed, undistributed
B) growth, speculative
C) common, preferred
D) dowry, canonical

Question

Quizplus · Accepted Answer

The most common way to transfer ownership in a family firm is through the distribution of common and preferred stock. Giving active children common stock allows them to have voting rights and control the management of the firm, while nonactive children can receive preferred stock, which typically has less voting power and is focused on receiving a higher return on investment. Options A, B, and D are not commonly used in the transfer of ownership.

A Parent Might Attempt to Resolve a Transfer of Ownership