Series 7

ABC Corporation has declared a record date of Thursday, May 17, for its next quarterly cash dividend. When is the last day the investor could purchase the stock regular way and receive the dividend? A. Monday, May 14 B. Tuesday, May 15 C. Wednesday, May 16 D. Thursday, May 17

A

An investor owns 3,000 shares of a low-priced common stock. After a 1:6 reverse split, how many shares wold he hold? A. 500 B. 3,000 C. 5,000 D. 18,000

A

Which of the following have equity positions in a corporation? I. Common stock holders. II. Preferred stockholders III. Convertible bond holders. IV. Mortgage bondholders A. I and II B. I and III C. II and III D. III and IV

A

ABC Corp. has outstanding a 10% noncumulative preferred stock. Two years ago, ABC omitted its preferred divided. Last year, it paid a dividend of $5 per share. In order to pay a dividend to common shareholders, each preferred share must be paid a dividend of: A. $5 B. $10 C. $15 D. $25

B

ABC common stock is currently selling for $150 per share with a quarterly dividend of $1.50. The current yield for ABC common stock is A. 1% B. 4% C. 12.5 % D. 25 %

B

An ADR represents A. a U.S. security in a foreign market. B. a foreign security in a domestic market. C. a U.S. security in both a domestic and a foreign market. D. a foreign security in both a domestic and foreign market.

B

If a corporation attaches warrants to a new issue of debt securities, which of the following would be a resulting benefit? A. Dilution of shareholders equity. B. Reduction of the debt securities' interest rate. C. Reduction of the number of shares outstanding. D. Increase in earnings per share.

B

In a portfolio containing common stock, preferred stock, convertible preferred stock, and guaranteed common stock, changes in interest rates would be most likely to affect the market price of the A. common B. preferred C. convertible preferred D. guaranteed

B

REITS must I. invest all their assets in real estate - related activities. II. distribute at least 90% of their net investment income. III. be organized as trusts. IV. pass along losses to share holders. A. I and II B. II and III C. II and IV D. III and IV

B

A corporation has a 2:1 stock split. Before the split, there were 1 million shares of $10 par common stock outstanding. Which of the following is (are) true? I. The par value remains at $10 per share. II. The par value is now $5 per share. III. There are still 1 million shares outstanding. IV. There are now 2 million shares outstanding. A. I and III B. II and III C. II and IV D. III and IV

C

Holders of both XYZ preferred stock and common shares are paid an annual dividend of $5 per share and then share equally in further dividends up to $1 per share in any one year. In these circumstances, the preferred stock is known as: A. cumulative B. adjustable C. participating D. convertible

C

If your client wished to purchase a preferred stock that would offer him the highest likelihood of assured income plus the opportunity to take part in the growth of a company's common stock, which of these features might he consider? I. Callable II. Convertible III. Cumulative IV. Straight A. I and II B. I and III C. II and III D. II and IV

C

Shareholder approval is required for all of the following corporate events EXCEPT: A. stock splits B. the acceptance of a tender offer. C. stock dividends. D. the issuance of convertible bonds

C

The board of directors is responsible for setting all of the following EXCEPT: A. declaration date B. payable date C. ex - dividend date D. record date

C

Treasury stock I. has voting rights and is entitled to a dividend when declared. II. has no voting rights and no dividend entitlement. III. Has been issued and repurchased by the company. IV. is authorized but unissued stock. A. I and III B. I and IV C. II and III D. II and IV

C

Which of the following statements regarding warrants is TRUE? A. Warrants give the holder a perpetual interest in the issuer's stock. B. The term of a warrant is generally shorter than the term of a right. C. Warrants are issued with other securities to make the offering more attractive. D. Warrants are safer than corporate bonds.

C

All of the following accurately describe a warrant EXCEPT: A. it is a sweetener to bond issues. B. it is a long term option to buy stock at a set price. C. no voting rights are involved. D. each warrant allows the owner to purchase a fractional share of the stock.

D

If ABC Corp. has a 6% participating preferred, the 6% represents the: A. dividend payment B. maximum dividend payment C. maximum dividend, but not the minimum D. minimum dividend, but not the maximum

D

Which of the following statements regarding dividend payments on common stock is TRUE: A. they must be paid if the corporation has earnings. B. Dividend payments are always in direct. C. Dividends are sometimes paid before preferred stockholders receive theirs. D. Dividends on common stock are paid at the discretion of the board of directors and may be paid whether there are earnings or not.

D