Question

Which group of equityholders can participate in the election of the board of directors?

a) Preferred stockholders
b) Common stockholders
c) Bondholders
d) Creditors

Answer 1

Common stockholders have the right to vote in the election of the board of directors for a public company, with the number of votes directly tied to the number of shares owned.

Step-by-step explanation:

The group of equityholders that can participate in the election of the board of directors are common stockholders. Common stockholders own shares of a public company, giving them voting rights to elect the board of directors. In contrast, preferred stockholders, bondholders, and creditors typically do not have this right. Voting power is proportionate to the number of shares a shareholder owns, potentially influencing the strategic direction of the company.