Common stockholders
A) must be paid a dividend.
B) interest.
C) may or may not be paid a dividend.
D) must buy new shares from the company.
C
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Which of the following correctly explains the crowding-out effect?
a) An increase in government expenditures decreases the interest rate and so increases investment spending. b) An increase in government expenditures increases the interest rate and so reduces investment spending. c) A decrease in government expenditures increases the interest rate and so increases investment spending. d) A decrease in government expenditures decrease the interest rate and so reduces investment spending.
Assume the United States is the "domestic" country and China is the "foreign" country. Which of the following might increase the real exchange rate between the United States and China?
A) an increase in the price level in the United States B) an appreciation of the yuan C) an increase in the price level of China D) a depreciation of the dollar