Discover the answers you need at Westonci.ca, where experts provide clear and concise information on various topics. Get immediate and reliable answers to your questions from a community of experienced experts on our platform. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.
Sagot :
Answer:
the maximum that shareholders can lose is their original investment in the firm's stock AND the claims of preferred shareholders are honored before those of the common shareholders.
Explanation:
     Bankruptcy may be defined as the legal proceedings that involves a person or a business where the person or the business firm is not able to repay the debts that are outstanding. When a firm or a person files a bankruptcy, there is an automatic stay put by the court that blocks the debts.
     In case of bankruptcy the different shareholders of the firm losses a maximum of their original investment that they have done in the firm while purchasing the stocks. And also the claims of the preferred shareholders are being honored first than those of common shareholders.
Thank you for your visit. We are dedicated to helping you find the information you need, whenever you need it. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.