Common stockholders have a legally enforceable claim to dividends.

Name: Common stockholders have a legally enforceable claim to dividends.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Common stockholders do not have a legally enforceable claim to dividends. Dividends are at the discretion of the company's board of directors and can be suspended or reduced if the company's financial situation warrants it. However, common stockholders do have a residual claim on the company's assets in case of liquidation.

Common Stockholders Have a Legally Enforceable Claim to Dividends