Ram is a stockholder in Endrun Investments,which is organized as a corporation.Endrun recently lost a major court decision and will probably be forced into bankruptcy.In fact,the damages awarded are so great that,even if all of its assets are sold and the proceeds are used to pay its debts,Endrun is likely to still owe money to its creditors.If Endrun does go bankrupt,Ram and the other stockholders will:
A)be entitled to full reimbursement of any investment losses.
B)be personally responsible for all remaining debts.
C)automatically qualify for federal reimbursement for any losses suffered by the firm.
D)lose their investment but nothing else.

Question

Quizplus · Accepted Answer

As a stockholder in Endrun Investments, Ram only owns a portion of the corporation, not the corporation itself. Therefore, in the event of bankruptcy, Ram would only lose his investment in the corporation and would not be personally responsible for any remaining debts.

Ram Is a Stockholder in Endrun Investments,which Is Organized as a Corporation.Endrun