What represents ownership in a publicly held company and may entitle owners to dividends?

What represents ownership in a publicly held company and may entitle owners to dividends?

• A. Common stock
• B. Debentures
• C. Government bonds
• D. Fixed deposits

Answer: (A)

Ownership in a publicly held company is represented by common stock. When individuals purchase common stock, they acquire a share of ownership in the company, which gives them certain rights, including the ability to vote on corporate matters and the potential to receive dividends. Dividends are distributions of a portion of the company's earnings to shareholders, and while not guaranteed, they are typically paid out when a company is profitable and decides to share its profits with its owners. Common stock serves as a key investment vehicle for investors seeking a stake in a company's future growth and financial performance, thereby creating a connection between the shareholders and the company's success. This aspect distinguishes common stock from other financial instruments listed, such as debentures, which represent debt rather than ownership, and government bonds or fixed deposits, which are also forms of debt investments providing fixed returns rather than equity ownership or potential dividend income.

Ownership in a publicly held company is represented by common stock. When individuals purchase common stock, they acquire a share of ownership in the company, which gives them certain rights, including the ability to vote on corporate matters and the potential to receive dividends. Dividends are distributions of a portion of the company's earnings to shareholders, and while not guaranteed, they are typically paid out when a company is profitable and decides to share its profits with its owners.

Common stock serves as a key investment vehicle for investors seeking a stake in a company's future growth and financial performance, thereby creating a connection between the shareholders and the company's success. This aspect distinguishes common stock from other financial instruments listed, such as debentures, which represent debt rather than ownership, and government bonds or fixed deposits, which are also forms of debt investments providing fixed returns rather than equity ownership or potential dividend income.