Final answer:
Corporate stockholders' financial liability is limited to the amount of their investment in the company, protecting individual assets from being used to cover the company's debts.
Step-by-step explanation:
Each corporate stockholder's financial liability is typically limited to their investment in the company. When individuals purchase stock, they become shareholders and part owners of the corporation, and the stock represents this ownership. Corporations are owned by shareholders who have limited liability for the company's debt, meaning they can lose their investment if the company fails, but they are not personally liable for the company's debts beyond that amount.
Shareholders are essential for a corporation as they can help raise funds for expansion by allowing the company to sell stock. Moreover, corporations take advantage of the ability to have multiple owners of the company through shares, which diversifies risk and makes it easier to raise capital.