Clough
Jan 30, 2010, 12:35 AM
Hi, Joaquina!
It could mean either one of them, depending on the context in which it's used.
What is the context in which it's being used, please?
Thanks!
Joaquina
Jan 30, 2010, 12:39 AM
Thanks Clough,
I have this scenario:
2. You buy 1000 shares of ABC Co. at $6 per share. The company is sued for millions of dollars, and ABC Co. is forced into bankruptcy. The newspaper stated that the cost of this suit would amount to $12 per share of stock.
Question:
What is the maximum amount of money you can lose with this investment? Why?
My answer is:
The maximum amount of money I can lose is $6,000 (1000 shares x $6) because, as a corporation shareholder, I have limited liability and I can never lose more than what I invested even though the corporation has unlimited liability.
But I am not sure if I am giving the correct interpretation...