Author Question: Describe two basic rights that stock ownership gives. What will be an ideal ... (Read 36 times)

krzymel · **on:** Jul 10, 2018

Describe two basic rights that stock ownership gives.

What will be an ideal response?

Question 2

The shares that are available for public purchase and subsequent trading in a secondary market such as the NYSE or NASDAQ are the issued shares of the company.

Indicate whether the statement is true or false.

owenfalvey · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

Answer: First, common stock ownership gives the shareholder the right to claim cash flows. These claims are referred to as residual ownership claims because they come after payment to the employees, suppliers, government, and creditors. Second, common stock ownership also provides the right to participate in the management of the company. Shareholders elect the board of directors, which ultimately selects the management team that runs the day-to-day operations of the company. The size of one's voice in the company is proportional to the percentage of common shares owned.

Answer to Question 2

Answer: TRUE