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JAMB Economics 1980 Question 43

Question 43

Business Organisations

In a limited liability company, the greatest risk is borne by

  1. A.debenture holders
  2. B.company executives
  3. C.ordinary shareholders
  4. D.preference shareholders
  5. E.board of directors.
Show the answer and explanation

Answer: C (ordinary shareholders)

Explanation

Ordinary shareholders are paid last, after creditors and preference shareholders, so they carry the greatest risk.