Which of the following is a characteristic of common stock?

Common stock is a type of security that represents ownership in a corporation and comes with certain rights and responsibilities for the shareholders. One of the defining characteristics of common stock is that, in the event of a liquidation of the company, common shareholders are indeed the last to be reimbursed. This means that if a company is going out of business and its assets are being sold off, common stockholders will only receive any remaining funds after all debts, preferred stock obligations, and other liabilities have been settled.

This characteristic highlights the risk associated with holding common stock, as there may be situations where shareholders receive little to no return on their investment if the company is liquidated. It also reflects the priority structure of equity and debt ownership in a company, where preferred stockholders and creditors have claims on assets before common stockholders.

In contrast, the other options describe features typically not associated with common stock. For instance, common stock does not guarantee dividends, which are paid at the discretion of the company. It also does not have a fixed interest rate because it represents ownership rather than debt obligations. Additionally, common stockholders usually possess voting rights, whereas non-voting shares would be linked to a different class of stock, often preferred stock. Therefore, understanding these