Question

question 8 (1 point)
which statement is true concerning common shareholders?
○ a) at the very least, you will always be paid dividends.
○ b) you are well protected in the event of corporate bankruptcy.
○ c) you have unlimited personal liability.
○ d) you may have capital gains or losses.

Explanation:

• Option a: Dividends are not guaranteed. A company may choose not to pay dividends even if profitable.
• Option b: In bankruptcy, common shareholders are last in line to be paid (after creditors, bondholders, preferred shareholders).
• Option c: Shareholders have limited liability (their personal assets are not at risk for the company's debts).
• Option d: When the share price changes, common shareholders can experience capital gains (if price rises) or losses (if price falls).

Answer:

d) You may have capital gains or losses.