Right to Vote on Relevant Matters

Question 1

Proxy

Answer 1

is an authorization to vote for a designated person on behalf of the shareholder. Prior to a shareholders’ meeting, holders of common stock will receive a proxy statement describing the issues up for vote and a ballot. If they choose not to attend the meeting, shareholders may “vote by proxy” by returning the ballot and authorizing a designated company manager to cast their vote as indicated.

Question 2

Statutory Voting

Answer 2

shareholders may vote their shares for or against a candidate for each open position.

Question 3

Cumulative voting

Answer 3

shareholders may vote up to their total voting shares (number of shares multiplied by number of open positions) for a single candidate.

Question 4

The dividends that have been paid for a given year can be found on a corporation’s

Answer 4

Cash Flow Statements

Question 5

f a company is forced to liquidate due to bankruptcy, common stockholders have a ____ to corporate assets after all debt obligations have been satisfied.

Answer 5

Residual claim

*This means that common stockholders are at the bottom of the list of claims on the corporation. They are paid only after bondholders and preferred stockholders have been paid.

Question 6

If a corporation decides to issue additional common stock, current stockholders, particularly early investors, may have the right to maintain their share of ownership by purchasing a proportionate amount of the new issue before it is offered to the public. When it is granted, this is called a

Answer 6

stockholder’s preemptive right.