Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment.If the company goes bankrupt, the most Medford could lose would be:
A)half of his investment
B)the par value of his stock
C)$600
D)$600 plus foreclosure costs
E)nothing--the company must reimburse him his investment

Question

Quizplus · Accepted Answer

The most Aaron Medford could lose is the total amount of his investment, which is $600. In the event of bankruptcy, investors can lose their entire investment, but they are not liable for the company's debts beyond that amount.

Aaron Medford Has Invested $600 in the Corporate Stock of a Manufacturer