A security that represents direct ownership interest in a corporation and allows the owner to share in the profits is known as which of the following?

Question

Quizplus · Accepted Answer

Common shares represent ownership in a corporation and entitle the shareholder to a portion of the company's profits through dividends. Mortgage bonds, in contrast, are debt securities backed by real estate assets. Preferred shares represent ownership in a corporation, but typically pay a fixed dividend and have priority over common shares in the event of liquidation. Convertible bonds are debt securities that can be converted into common shares at a specified price and time.

A Security That Represents Direct Ownership Interest in a Corporation