Rights of Common Stockholders

What this video covers

• Why cumulative voting benefits minority shareholders, and the exam trap that majority shareholders win under statutory (regular) voting
• How pre-emptive rights work through rights offerings, and why they are NOT automatic without charter grant
• The three dividend types (cash, stock, and property): what is distributed and how each is taxed
• Why the board of directors has zero legal obligation to declare common stock dividends, unlike cumulative preferred stock where skipped dividends accumulate
• What constitutes a proper purpose for inspecting corporate books and records, and when the right is denied
• The exact liquidation priority order: secured creditors, then unsecured/general creditors, then subordinated debenture holders, then preferred stockholders, then common stockholders last
• Why common stockholders bear the greatest risk but retain unlimited upside potential, making the residual claim the core risk-reward trade-off