Ch. 1 Industry Terminology and Data Collection

Question 1

T/F: A partnership can own shares of a Subchapter S Corporation?

Answer 1

False

Question 2

Are distributions from a Subchapter S Corporation a taxable or non-taxable return of capital?

Answer 2

Non-taxable

Question 3

Will the sale of Subchapter S Corporation shares result in taxable or non-taxable capital gains or losses?

Answer 3

Taxable

Question 4

For a Subchapter S Corporation, is a married couple considered one or two shareholders?

Answer 4

One shareholder

Question 5

How many shareholders is a Subchapter S Corporation limited to?

Answer 5

100 shareholders

Question 6

Can a Subchapter S Corporation list on an exchange?

Answer 6

No

Question 7

Can an LLP, MLP, LLC and C Corporation have a unlimited number of shareholders and trade on an exchange?

Answer 7

Yes

Question 8

What % of REIT’s income is passed through?

Answer 8

90%

Question 9

Can REITs pass through losses?

Answer 9

No

Question 10

A large accelerated filer has a public float of ____ or more

Answer 10

$700 million

Question 11

An accelerated filer has a public float of at least ____ million

Answer 11

$75 million but less than $700 million

Question 12

A non-accelerated filers has a public float of less than _____ million

Answer 12

Less than $75 million

Question 13

For a 10-k, BS info must be for the previous ___ years and income / cash flow statements must be for the previous ____ years

Answer 13

BS- latest 2 fiscal years

IS / CF- latest 3 fiscal years

Question 14

Is a form 10-Q audited?

Answer 14

No, generally unaudited

Question 15

What is filed by any person that acquires more than 5% of an issuer’s equity?

Answer 15

Schedule 13D

Question 16

If (3) different investors who each own 3% of a company’s equity, must they file a Schedule 13D?

Answer 16

Yes

Question 17

How many days must the annual proxy be sent to shareholders before the meeting date?

Answer 17

20 days

Question 18

Does the proxy include the voting records of board members, minutes from board meetings, or the results of previous votes?

Answer 18

No

Question 19

What would be reviewed to determine an issuer’s largest shareholders?

Answer 19

13D, 13G, 10K, or Proxy

Question 20

SARBOX indicates what (2) business leaders must certify the annual financial reports

Answer 20

CEO + CFO

Question 21

What is the first step if an outside auditor (accountant) determines that an illegal act may have
occurred

Answer 21

It should first be reported to the audit committee of the board of directors

Question 22

A board director who attended less than 75% of the board meetings is reported on the _____

Answer 22

Annual proxy

Question 23

Do the members of the audit committee have to be independent directors?

Answer 23

Yes

Question 24

What type of strategy is used to purchase an undervalued stock that has good growth potential?

Answer 24

Growth at Reasonable Prices (GARP) strategy