Which of the following is not a true statement? Common stockholders have a resid

Question

Which of the following is not a true statement?

Common stockholders have a residual claim to income.

Bondholders may force a corporation into bankruptcy for failure to make interest payments.

Common stockholders are legally entitled to some dividend.

A minority interest can still elect members to the Board of Directors under cumulative voting even though someone else owns 51% of the stock.

Common stockholders have a residual claim to income.

Bondholders may force a corporation into bankruptcy for failure to make interest payments.

Common stockholders are legally entitled to some dividend.

A minority interest can still elect members to the Board of Directors under cumulative voting even though someone else owns 51% of the stock.

Explanation / Answer

Answer

C) Common stockholders are legally entitled to some dividend.

Note : Common stockholders have a residual claim to income as Common Stockholder have Net Income after preferred Stock Dividend that means it have residual Income

If Company or Corporation fails to pay interest that means company is in position of bankruptcy and than bondholder may force a corporation for bankruptcy after a legal notice

As there has been a law that given a benefiet to minority interest can elect member to board of meeting under cumulative voting.

Preferred stockholder are legally entitled to some dividend if company has net income in that year

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