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Which of the following is not considered a financial benefit for owning common stock?

a) limited liability
b) the potential for income
c) the potential for capital growth
d) price stability

1 Answer

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Final answer:

The correct answer is limited liability.

Step-by-step explanation:

The correct answer is a) limited liability.

Limited liability is a legal protection that limits the amount of personal liability a common stockholder has in case the company goes bankrupt or gets sued. This means that shareholders are not personally responsible for the company's debts beyond their investment in the stock. It is a financial benefit because it reduces the risk for investors, but it is not exclusive to common stock ownership as it can also apply to other forms of ownership such as limited liability partnerships.

The other options, b) the potential for income, c) the potential for capital growth, and d) price stability are all considered financial benefits of owning common stock. These benefits include the possibility of receiving dividends or capital gains, as well as the potential for the stock price to remain relatively stable.

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