SIE Exam Question 574: Answer and Explanation

Question: 574

Common stock is referred to as __________ because the owner of the stock is also an owner of the corporation and may participate in its capital and income growth.

• A. cumulative stock
• B. debt
• C. equity
• D. preferred stock

Correct Answer: C

Explanation:

Common stock is referred to as equity because the owner of the stock is also an owner of the corporation and may participate in its capital and income growth.