Which of the following is usually a right of common shareholders in a corporation?

• A. The right to approve the appointment of the external auditor
• B. The right to vote in the election of the board of directors
• C. The right to set the corporation's management salaries
• D. The right to receive a fixed dividend each year

Answer: (B)

Verified step by step guidance

1. Understand the role of common shareholders in a corporation. Common shareholders are individuals or entities that own common stock in a company, which typically grants them certain rights and privileges.
2. Review the typical rights of common shareholders. These rights often include voting in corporate matters, receiving dividends (if declared), and having a residual claim on assets in the event of liquidation.
3. Analyze the options provided in the question. Evaluate each option to determine whether it aligns with the rights commonly granted to shareholders. For example, common shareholders generally do not have the right to approve the appointment of external auditors or set management salaries.
4. Focus on the right to vote in the election of the board of directors. This is a fundamental right of common shareholders, as they have a say in the governance of the corporation by electing individuals to oversee its operations.
5. Conclude that the correct answer is the right to vote in the election of the board of directors, as this is a standard privilege associated with owning common stock in a corporation.