Cynthia plans to buy 100 shares of common stock in the Idaho Spud Corporation. She willingly accepts the risk of this investment because she:

Question

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Cynthia is willing to invest in common stock because she desires an opportunity to share in the success of the company. Common stockholders are able to benefit from the company's growth and profitability through a higher return on investment or increased share value. Option A is incorrect because creditors are not typically protected from risk, as they are making a loan to the company and may not receive full payment if the company goes bankrupt. Option C is incorrect because investing in stocks is not gambling, as it involves a legitimate ownership in a company. Option D is unlikely to influence Cynthia's decision to invest in Idaho Spud Corporation.

Cynthia Plans to Buy 100 Shares of Common Stock in the Idaho