22.0k views
3 votes
Patricia holds 150 shares of common stock in a large corporation. Patricia:

1) is guaranteed the rights to some of the profits of the corporation.
2) is most likely entitled to two votes for each share of stock she holds.
3) will not be included in the distribution of capital upon dissolution of the corporation.
4) risks whatever money she invested in the 150 shares of common stock.

1 Answer

2 votes

Final answer:

Patricia's ownership of 150 shares of common stock in a large corporation guarantees her rights to some of the profits. While it is not guaranteed that she is entitled to two votes per share, she does face the risk of losing her investment if the stock value decreases. However, she will not be included in the distribution of capital upon dissolution of the corporation.

Step-by-step explanation:

When someone buys stock, they become a shareholder and own a portion of the company. The stock is divided into shares, and owning shares means having ownership in the company. In this case, Patricia holds 150 shares of common stock in a large corporation, which means she has ownership rights to a portion of the company.

As a shareholder, Patricia is entitled to some of the profits of the corporation. This is because stock ownership comes with the right to receive dividends, which are a portion of the company's profits distributed to shareholders. The more shares she owns, the more money she will receive.

However, it is not guaranteed that Patricia is entitled to two votes for each share of stock she holds. This decision is determined by the corporation's bylaws, which can vary. Some corporations may grant voting rights based on the number of shares owned, while others may have different rules regarding voting.

Additionally, when a corporation is dissolved, shareholders are typically not included in the distribution of capital. Shareholders are considered owners of the company's equity, which is a different category from the distribution of capital. The distribution of capital usually includes payments to creditors and other parties involved in the dissolution.

Finally, as a shareholder, Patricia does face the risk of losing whatever money she invested in the 150 shares of common stock. If the value of the stock decreases, she may experience a loss when selling the shares. Stock prices can fluctuate based on various factors, including market conditions, company performance, and investor sentiment.

User Jpap
by
8.5k points