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Questions and Answers
What type of stockholders have voting rights?
What type of stockholders have voting rights?
- Bondholders
- Preferred stockholders
- Stockbrokers
- Common stockholders (correct)
Which type of stockholders receive preference in dividends and bankruptcy situations?
Which type of stockholders receive preference in dividends and bankruptcy situations?
- Common stockholders
- Preferred stockholders (correct)
- Stockbrokers
- Bondholders
Who becomes a creditor of the company when purchasing a bond?
Who becomes a creditor of the company when purchasing a bond?
- Bondholders (correct)
- Preferred stockholders
- Stockholders
- Common stockholders
Where does the trading of stocks take place?
Where does the trading of stocks take place?
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What represents a promise from a company to pay the face amount to the bond owner at a future date?
What represents a promise from a company to pay the face amount to the bond owner at a future date?
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Who receives a commission for the services of both buying and selling stocks?
Who receives a commission for the services of both buying and selling stocks?
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Study Notes
Stockholders and Bondholders
- Common stockholders have voting rights, allowing them to participate in company decisions.
- Preferred stockholders have preference in dividends and bankruptcy situations, receiving payments before common stockholders.
Bond Ownership
- Bondholders become creditors of the company, essentially lending money to the corporation.
Trading Platforms
- Stocks are traded on stock exchanges, such as the New York Stock Exchange (NYSE) or NASDAQ.
Bonds and Dividends
- A bond represents a promise from a company to pay the face amount to the bond owner at a future date, along with interest earned.
Brokerage Services
- A broker receives a commission for facilitating both buying and selling of stocks, earning a fee for their services.
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