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What's There to Lose?

August 15, 2011 | Corporate Finance

What does a stockholder lose when a corporation does not have enough assets to meet the claims of creditors?

Quiz Results
Answer Key #1 His or her share of indebtedness
#2 The stock's par value
#3 His or her original investment
#4 Nothing

Correct Answer: # 3

The stockholder only loses the original investment that he or she made.

Shareholders have limited liability so they can only lose what they originally invested in the company.

Quiz Answer History

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