Firms are obligated to return a principal amount per share to each holder of common stock.

Question

Quizplus · Accepted Answer

Firms are not obligated to return a principal amount per share to each holder of common stock. Common stock represents ownership in the company and provides the possibility of earning dividends and capital gains, but there is no guarantee of a set return of principal. The value of the stock fluctuates based on market demand and company performance.

Firms Are Obligated to Return a Principal Amount Per Share