Question
Which of the following are features of common stock?
Multiple select question.
It generally has voting rights.
It receives dividends every quarter.
It has no special preference in receiving dividends.
It receives interest semi-annually.
It has no special preference in bankruptcy.
Multiple select question.
It generally has voting rights.
It receives dividends every quarter.
It has no special preference in receiving dividends.
It receives interest semi-annually.
It has no special preference in bankruptcy.
Answers
GPT-4o mini
The features of common stock from the options provided are:
1. **It generally has voting rights.** - Common stock typically grants shareholders the right to vote on corporate matters, such as the election of the board of directors.
2. **It has no special preference in receiving dividends.** - Common stockholders do not have preferential treatment when it comes to dividend payments; dividends are paid at the discretion of the company's board and common shareholders are last in line after preferred shareholders.
3. **It has no special preference in bankruptcy.** - In the event of bankruptcy, common stockholders are last to receive any remaining assets after debt holders and preferred shareholders have been paid.
The other options are not features of common stock:
- **It receives dividends every quarter.** - Dividends are not guaranteed and are not necessarily paid every quarter on common stock; it depends on the company’s performance and board decisions.
- **It receives interest semi-annually.** - Common stock does not pay interest; interest payments are associated with debt securities, such as bonds.
So, the correct selections are:
- It generally has voting rights.
- It has no special preference in receiving dividends.
- It has no special preference in bankruptcy.
1. **It generally has voting rights.** - Common stock typically grants shareholders the right to vote on corporate matters, such as the election of the board of directors.
2. **It has no special preference in receiving dividends.** - Common stockholders do not have preferential treatment when it comes to dividend payments; dividends are paid at the discretion of the company's board and common shareholders are last in line after preferred shareholders.
3. **It has no special preference in bankruptcy.** - In the event of bankruptcy, common stockholders are last to receive any remaining assets after debt holders and preferred shareholders have been paid.
The other options are not features of common stock:
- **It receives dividends every quarter.** - Dividends are not guaranteed and are not necessarily paid every quarter on common stock; it depends on the company’s performance and board decisions.
- **It receives interest semi-annually.** - Common stock does not pay interest; interest payments are associated with debt securities, such as bonds.
So, the correct selections are:
- It generally has voting rights.
- It has no special preference in receiving dividends.
- It has no special preference in bankruptcy.