Which ONE of the following statements is true about common stock?

Question

Quizplus · Accepted Answer

Common stock represents ownership in a company, but it does not have a fixed maturity, nor are owners guaranteed dividends. In the event of bankruptcy, common stockholders have the lowest priority claim on the firm's assets, meaning that they will only receive payment after all other claims are satisfied. Common stockholders also have limited liability, meaning they cannot lose more than their invested capital. Therefore, the only true statement about common stock is that owners of common stock have the lowest-priority claim on the firm's assets in the event of bankruptcy.

Which ONE of the Following Statements Is True About Common