Preferred Stock

A customer buys 100 shares of preferred at 80 per share the part value is 100 the dividend rate is 10% the customer receive how much and each didn't and payment: A. $400 B. $500 C. $800 D. $1000

$500

A customer owns 1,000 shares of ABC preferred stock trading at $120 per share. Following a 2:1 common stock split, the customer will have: I. 1,000 shares II. 2,000 shares III. at $60 IV. at $120

1,000 shares at $120

Convertible Preferred:

Convert into common stock at a predetermined price.

What type of preferred stock and move in price as the price of the common stock moves: A. Straight Preferred B. Cumulative Preferred C. Convertible Preferred D. Participating Preferred

Convertible Preferred

All the following statements are true about preferred stocks except: A. Preferred Dividends are paid before common B. In most cases dividends are paid semi annually C. Corporations must pay preferred dividends D. Preferred shareholders are paid before common shareholders upon liquidation of a corporation

Corporations must pay preferred dividends

If interest rates rise the following happens to Preferred stock: I. Preferred stock prices drop II. Preferred stock prices stay III. Preferred stock prices rise IV. Preferred stocks are called

I. preferred stock prices drop

If interest rates drop Preferred Stock prices will: I. Preferred stock prices drop II. Preferred stock prices stay III. Preferred stock prices rise IV. Preferred stocks are called

III. Preferred stock prices rise

Callable Preferred:

Issuer can call in shares at par. Issuer will call in if interest rates have fallen. Reissue at lower rate

A middle aged widowed customer has an investment objective of stable income would also like to receive occasion or extra income to help pay unexpected bills what type of preferred stock would be the best: A. Participating Preferred B. Convertible Preferred C. Straight Preferred D. Variable Rate Preferred

Participating Preferred

Common stockholders and preferred stockholders both have: A. Voting Rights B. Pre-Emptive Rights C. Dividend Rights D. Subscription Rights

Dividend Rights

Cumulative Preferred:

Dividends accumulate. All accumulated preferred must be paid.

Participating Preferred:

Fixed dividend rate. Participates in any extra dividends declared by BOD