Common stockholders have a residual claim to income


Which of the following is not a true statement?

A. Common stockholders have a residual claim to income.

B. Bondholders may force a corporation into bankruptcy for failure to make interest payments.

C. Common stockholders are legally entitled to some dividend.

D. A minority interest can still elect members to the Board of Directors under cumulative voting even though someone else owns 51% of the stock.

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Financial Management: Common stockholders have a residual claim to income
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