When a household owns shares of stock, _____. it has ownership rights in that fi
ID: 1193936 • Letter: W
Question
When a household owns shares of stock, _____.
it has ownership rights in that firm
it is entitled to the majority of the firm’s profits
it is liable to bear the entire loss faced by the firm
it can consume the firm’s products without paying for it
it is responsible for correcting any defect in the product identified by the customers
A.it has ownership rights in that firm
B.it is entitled to the majority of the firm’s profits
C.it is liable to bear the entire loss faced by the firm
D.it can consume the firm’s products without paying for it
E.it is responsible for correcting any defect in the product identified by the customers
Explanation / Answer
Owning shares of stock does not mean that household has full control over the firm. It has partial right in the form of ownership. It does not have full right over the profits of firm and it does not deal with customers directly either.
Thus correct option is (A)
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