Question

Which one of the following is not a right of common stockholders?a) To share proportionately in all management decisions.b) To share proportionately in corporate assets upon liquidation.c) To share proportionately in any new issues of stock of the same class.d) To share proportionately in profits and losses.

Answer 1

Answer: Option A

Explanation: Common stockholders refers to the holders of common equity of an organisation. These shareholders are actually the owners of the organisation. They have the potential to earn maximum benefit and bear the maximum risk.

They have the right to select the auditor and board of directors but they cannot interfere with the management decisions. This right stands in the domain of the top managers which are appointed by these shareholders.

Thus, we can conclude that the correct option is A .