Chapter 1 Practice Quiz Flashcards
Which of the following would not be a right of a common stockholder holder?
A.The right to keep a proportionate share of the company if more shares are issued
B.Right to vote for or against board members
C.The right to vote on whether to pay a dividend
D.The right to inspect the books of the company
C. The right to vote on whether to pay a dividend
A shareholder has 600 shares of a company ‘s stock. The company employees cumulative voting. What is the maximum number of shares of stock order could cast for one boardmember if three board members are up for election?
A.200
B.600
C.1200
D. 1800
D. 1800
Which of the following is not true of treasury stock?
A.It pays dividends
B.It has no voting rights
C.It is equal to issued shares minus outstanding shares
D.Corporations may acquire their own stock thereby creating Treasury stock in boosting their earnings per share
A.It pays dividends
Long life medical devices as a current share price of $20. Long life has authorized 100 million shares, issued 40 million shares, and re-purchased 5 million shares. What are long life’s outstanding shares and market capitalization?
A.40 million; $800 million
B.35 million;$700 million
C.60 million;$1,200 million
D.5 million;$100 million
B. 35 million;$700 million
Which of the following is not a way stocks can be held?
A.Direct registration
B.Street name
C.Beneficial ownership
D.Stock certificate
C. Beneficial ownership
Which of the following is true of the transfer agent and the registrar?
A.The registrar cancels stock certificates surrendered by the seller and issues new ones in the name of the buyer
B.The registrar pays out dividends
C.The register and make sure that the company does not issue more shares and we’re authorized
D.The register in the transfer agent are usually not independent of one another
C.The registrar and make sure that the company does not issue more shares then were authorized
The prices of which of the following two types of preferred stock or least sensitive to changes in interest rates?
A.Participating preferred
B.Cumulative preferred
C.Adjustable rate preferred
D.Convertible preferred
C. & D. Adjustable rate preferred & Convertible preferred
American depository receipts are?
Receipts issued for four in stock
ADRs trade in?
US dollars
Warrants differ from rights how?
Warrants are long term, while Rights are short term
Warrants or typically offered as sweeteners for other securities, while rights are only offered to existing shareholders
Callable preferred stock is more likely to be called when?
Interest rates go down
To hold a security and street name means?
You are the beneficial owner of the security
Why do corporations often by preferred stock?
Because they can deduct up to 50% of the dividends from there taxable income
