Which of the following statements about common stock is incorrect? O A. The pree

Question

Which of the following statements about common stock is incorrect? O A. The preemptive right gives current stockholders the right to purchase any new shares issued by the company. O B. Stockholders exercise control over the company by voting for board members. O C. Common stockholders are the owners of for-profit corporations. O D. The claim of shareholders on the cash flows of the firm is limited to the dividends they receive (i.e., they have no claim on a business's residual earnings) O E. In the event of bankruptcy and liquidation, shareholders often receive none of the proceeds Reset Selection

Explanation / Answer

The correct statement is E.

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In the event of liquidation, common stock holders may get the proceeds but only after debt holders and preferred stock holders are paid.

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