You paid $10,000 to buy 1% of the stock in a corporation that has now gone bankrupt.The company owes $10 million dollars to creditors.As a result of the bankruptcy,you will lose $100,000.
BT: Comprehension

Question

Quizplus · Accepted Answer

If you have bought 1% stock of the company for $10,000, then you have invested $1 million in the company. However, even if the company goes bankrupt and owes $10 million to creditors, your loss would be only 1% of $10 million, which is $100,000. Therefore, you would not lose the entire $1 million investment.

You Paid $10,000 to Buy 1% of the Stock in a Corporation