Question

which of the following is true about shareholders holding common stock? they have bankruptcy payout priority over creditors and can cast proxy ballots. they receive a payout before preferred stock holders when there is bankruptcy. they have voting rights that allow them to influence corporate decisions. they never have voting rights and have the lowest preference for payout.

Explanation:

• Analyze each option:
• Option 1: Creditors have priority over shareholders (including common stockholders) in bankruptcy payouts, so this is false.
• Option 2: Preferred stockholders have priority over common stockholders in bankruptcy payouts, so this is false.
• Option 3: Common stockholders typically have voting rights that let them influence corporate decisions (like electing board members), so this is true.
• Option 4: Common stockholders do have voting rights (in most cases), so this is false.

Answer:

The correct option is: They have voting rights that allow them to influence corporate decisions.