Common Stock

A customer owns 200 shares of ABC stock. ABC is having a rights offering where 20 rights are needed to subscribe to 1 new share. The customer will receive: a. 1 right b. 10 rights c. 100 rights d. 200 rights

d. 200 rights.

Which of the following are equity security holders of the company? I. common shareholders II. preferred shareholders III. convertible bondholders IV. warrant holders a. I and II b. II and III c. I, II, IV d. I, II, III, IV

a. I and II.

Which of the following terms describes common stock? a. negotiable b. redeemable c. non-negotiable d. callable

a. negotiable.

ABC Corporation has declared a rights offering to stockholders of record on December 10th. Under the offer, shareholders need 10 rights to subscribe to 1 new share at a price of $19. Fractional shares can be rounded up to purchase 1 full share. As of Wednesday, December 1st, the stock is trading at $30. The value of the right is: a. $.90 b. $1.00 c. $1.10 d. $1.25

b. $1.00.

ABC Corporation has declared a rights offering to stockholders of record on December 10th. Under the offer, shareholders need 10 rights to subscribe to 1 new share at a price of $19. Fractional shares can be rounded up to purchase 1 full share. As of the ex date the stock is trading at $29. The value of the right is: a. $.90 b. $1.00 c. $1.10 d. $1.25

b. $1.00.

ABC Corporation has declared a rights offering to stockholders of record on December 10th. Under the offer, shareholders need 10 rights to subscribe to 1 new share at a price of $19. Fractional shares can be rounded up to purchase 1 full share. A customer owning 111 shares wishing to subscribe. The market price of the stock is currently $30. The customer can buy: a. 11 shares for $209 b. 12 shares for $228 c. 11 shares for $341 d. 12 shares for $372

b. 12 shares for $228.

The market price of common stock will be influenced by which of the following? I. the par value of the shares II. expectations for future earnings of the company III. expectations for future dividends to be paid by the company IV. book value of the company a. I and IV b. II and III c. I, II, III d. II and IV

b. II and III.

Which of the following statements are TRUE regarding Treasury Stock? I. treasury stock receives dividends II. treasury stock votes III. treasury stock reduces the number of shares outstanding IV. treasury stock purchases are used to increase reported earnings per share a. I and II b. III and IV c. II, III, IV d. I, II, III, IV

b. III and IV.

In a corporate liquidation, common stockholders are paid: a. before bondholders and preferred stockholders b. after bondholders and preferred stockholders c. after bondholders but before preferred stockholders d. before all creditors

b. after bondholders and preferred stockholders.

The definition of treasury stock is: a. issued stock minus authorized stock b. issued stock minus outstanding stock c. authorized stock minus outstanding stock d. outstanding stock minus authorized stock

b. issued stock minus outstanding stock.

Common dividends are usually paid: a. monthly b. quarterly c. semi-annually d. annually

b. quarterly.

In a rights offering, shareholders who subscribe make payment to the: a. stand-by writer b. rights agent for the issuer c. brokerage firm d. trustee

b. rights agent for the issuer.

ABC Corporation has declared a cash dividend to stockholders of record on Friday, December 10th. The last day to buy ABC shares BEFORE they go ex dividend is? a. tuesday, december 7th b. wednesday, december 8th c. thursday, december 9th d. friday, december 10th

b. wednesday, december 8th.

Which of the following are functions of the transfer agent? I. mailing dividend payments to shareholders II. canceling old shares and issuing new shares III. preparing and mailing proxies IV. setting the declaration date a. I and II b. III and IV c. I, II, III d. I, II, III, IV

c. I, II, III.

Which of the following are TRUE statements regarding the activities of the registrar? I. the registrar cancels old shares II. the registrar transfers shares to new owners III. the registrar accounts for the number of shares issued IV. the registrar keeps the integrity of the shareholder record a. I and II b. II and IV c. III and IV d. I, II, III, IV

c. III and IV.

The Board of Directors of a company will set all of the following EXCEPT: a. declaration date b. record date c. ex date d. payable date

c. ex date.

A customer gives a power of attorney to a caretaker to vote his shares on his behalf at the company's annual meeting. This is called (a): a. discretionary authority b. voting trust c. proxy d. trading authorization

c. proxy.

Stockholder approval is needed if a corporation wishes to do all of the following EXCEPT: a. split its stock 1 for 2 b. split its stock 2 for 1 c. repurchase shares for Treasury d. issue convertible securities

c. repurchase shares for Treasury.

All of the following are rights of a common shareholder EXCEPT the: a. right to vote b. right to receive a dividend c. right to manage d. right to transfer shares

c. right to manage.

Cumulative voting is considered to be an advantage to the: a. large investor b. institutional investor c. small investor d. novice investor

c. small investor.