Characteristics of Common Shares

Easy Equity Markets And Instruments Common Shares

Common shares are a fundamental equity instrument that represent ownership in a corporation. Shareholders of common shares have certain rights, including voting on corporate matters and receiving dividends. However, the characteristics and rights associated with common shares can vary significantly depending on the issuing company's policies. Investors must be aware of the key attributes of common shares when deciding to invest.

Which of the following statements correctly describes a characteristic of common shares?

Common shares usually have a fixed dividend rate that must be paid before any dividends are distributed to preferred shareholders.

Common shareholders typically possess voting rights that allow them to influence corporate governance.

Common shares always have priority over all other securities in the event of bankruptcy.

Hint

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