174k views
2 votes
The ownership in a corporation is divided into shares of stock, which carry rights to a share in the profits of the firm through future dividend payments. True or False

User Sigmatics
by
9.1k points

1 Answer

2 votes

Final answer:

The statement is true, as ownership in a corporation is represented by shares of stock, which grant the owner a right to the firm's profits, often through dividends. Shareholders thus have a stake in the company proportional to the shares they own.

Step-by-step explanation:

The statement that ownership in a corporation is divided into shares of stock, which carry rights to a share in the profits of the firm through future dividend payments is true. Those who buy stock become the firm's owners, or shareholders. A person who owns 100% of a company's stock owns the entire company, but typically in large firms like IBM or Microsoft, numerous shareholders each have only a small portion of the company's overall ownership. These corporations may raise funds to finance operations or investments by selling stock or issuing bonds. The sale of stock equates to selling a piece of the company's ownership, and shareholders may be entitled to dividends which are a distribution of the company's profits.

User Jeff Bloom
by
9.2k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories