Which of the statements below is TRUE?
A)The profits for common stock owners come after payment to the employees,suppliers,government,and creditors.
B)Shareholders elect the board of directors,which ultimately selects the bondholder team that runs the day-to-day operations of the company.
C)Stock is a minor financing source for public companies.
D)Stockholders are paid before debt holders (bondholders)if a company fails.

Question

Quizplus · Accepted Answer

Common stockholders are the last group to receive payment in the case of a company's liquidation, following payment to employees, suppliers, government, and creditors. This is because common stock represents ownership equity and comes with a higher level of risk compared to debt financing.

Which of the Statements Below Is TRUE