In a corporation, shareholders typically have the right to share proportionally in which of the following?

• A. The corporation's legal liabilities
• B. The corporation's daily management decisions
• C. Dividends paid by the corporation
• D. The salaries of corporate officers

Answer: (C)

Verified step by step guidance

1. Understand the concept of shareholder rights: Shareholders are partial owners of a corporation and have specific rights, such as voting on major corporate decisions, receiving dividends, and sharing in the residual assets upon liquidation.
2. Clarify the term 'dividends': Dividends are payments made by a corporation to its shareholders, typically derived from the company's profits. Shareholders have the right to share proportionally in dividends based on the number of shares they own.
3. Eliminate incorrect options: Shareholders do not share in the corporation's legal liabilities, as the corporation is a separate legal entity. They also do not participate in daily management decisions, which are handled by corporate officers and managers. Similarly, shareholders do not share in the salaries of corporate officers.
4. Focus on the correct option: Shareholders have the right to share proportionally in dividends paid by the corporation. This is a fundamental benefit of owning shares in a company.
5. Summarize the reasoning: The correct answer is 'Dividends paid by the corporation' because it aligns with the rights of shareholders to receive a portion of the company's profits based on their ownership stake.