Question

Gary owns shares in a company called Archibald Industries Inc. The company's financial performance has been declining over the past few months, and the value of its stock has been decreasing. Gary wants to proactively cut his losses and therefore sells his shares. Anneke, a trading enthusiast, buys shares in Archibald Industries because she believes that the share prices cannot go anywhere but up. Which of the following characteristics of a public stock company does this scenario best exemplify?a) legal personality b) separation of legal ownership and management control c) transferability of investor ownership d) limited liability for investors

Answer 1

Answer:

transferability of investor ownership

Answer 2

Answer:

The answer is C. transferability of investor ownership

Explanation:

Transferability of investor ownership is a characteristic of a public stock company in which the stocks owned by shareholders and investors can be sold and bought at will. This means that investors can choose to sell their stake in a company whenever they feel that it is unsafe to continue investing in the company. Conversely, investors can also choose to purchase stock in a public company if they feel that the company is profitable, or will be profitable in future.

In summary therefore, transferability of investor ownership describes a process whereby investors are allowed to trade shares of stocks.