Question

Carter is a stockholder in ExtremeTrax, Inc., a C corporation that designs and manufactures amusement park roller coasters. The company recently lost a major court decision and is being forced into bankruptcy. In fact, the damages being awarded are so large that, even if all company assets are sold and the proceeds are used to pay its debts, ExtremeTrax is likely to still owe money to its creditors. If ExtremeTrax goes bankrupt, Carter and the other stockholders will

Answer 1

Answer:

Carter and the other stockholders will lose all money and their shares in case that Extreme Trax goes bankrupt

Explanation:

If a company goes bankrupt, then the creditors are paid first. Stockholders own shares of the company; thus, they exhibit the highest risk. In case that there is no money left after paying creditors, stockholders will lose the investments.