Question

Common stocks typically have which of the following that bonds do NOT have?

I. Voting rights
II. Fixed cash flows
III. Set maturity date
IV. Tax deductibility of cash flows to investors
a) i only
b) i,ii and iv only
c) ii,iii and iv only
d) iv only
e) i, ii,iii and iv

Answer 1

The correct option is A, i only

Step-by-step explanation:

The voting right attached to common stock means that common stockholders being the original owners of the company have the right to attend the company annual general meetings and vote on issues concerning the efficient running of the company as well as election of board of directors.

Fixed cash flows of annual or semiannual coupon interest, set maturity date including the tax deductibility of cash flows to investors are all features of bonds.