Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 11 - Reporting and Analyzing Stockholders' Equity - Questions: 4

Answer

The Basic Ownership rights to common stock holders are as under:

Work Step by Step

- Vote in election of board of directors, and to the resolutions where the approval of stock holder is required. · Share the corporate earnings through dividends. - To keep the same percentage of rights, when the new shares are issued. - Share the assets of the corporation in case of liquidation. This is a residual claim as the common stock holders will get a share, after payment to Creditors and Preference share holders.
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