Equity securities chapter (exam review)

ABC Company raised its cash dividend from 18 cents to 19 1/2 cents and also declared a 5% stock dividend. The record date of the cash dividend is Thursday, May 20 and the record date of the stock dividend is Wednesday, may 12. An investor buys 1,000 shares of ABC regular way on Wednesday, May 12. The customers will receive a cash dividend of?

$195.00

When a common stock has a long record of growth, quality management, and services and consistently pays a moderate dividend, it would generally be referred to as a:

Blue chip stock

REITS can pass through all of the following to investors except:

Capital losses

A corporate stockholder has a "residual claim". This refers to the stockholder's right to:

Corporate assets remaining at dissolution after the satisfaction of senior obligations

ADR's are used to facilitate?

Domestic trading of foreign securities

The Eskimo Cup Company announces a 20 cent dividend payable March 15th to owners of record Thursday, February 19th and declares a 5% stock dividend payable March 15th to owners of record Friday, February 13th. An investor buys 2,000 shares regular way on Monday, February 16th. He would expect a cash dividend of?

20 cents per share on 2,000 shares.

A corporation has authorized common stock of 10,000,000 shares . 8,000,000 shares have been issued and 4,000,000 shares are treasury stock. Which of the following is true?

4,000,000

A corporation with cumulative voting has two spots open on the board of directors. A customer who owns 250 shares could vote in all of the following ways except:

500 votes for each director

You are evaluating a number of preferred stocks with varying features. One of the preferred stocks with varying features. One of the preferred stocks that you are evaluating shows a pattern of increased market value in relation to increases in the market value of the common stock of the company. Of the following preferred stock features, which is the MOST LIKELY cause of this pattern?

The preferred stock likely carries a cumulative feature

All of the following are true about REITs except:

They are recognized as direct participation programs

All of the following are characteristics of REITS's except ?

They must be registered under the investment company act of 1940.

A security which gives the holder the privilege of investing in a company's stock at a pre-determined price at any time, over a long period of time is known as a ?

Warrant

Which regard to common stock prior stockholder's vote is required for which of the following?

A 3 for 1 stock split

A common stockholder in a corporate liquidation has:

A claim on the assets prior to subordinate lenders but after secured creditors

Which of the following companies is most likely to pay a stock dividend?

A company with 25% a small cash balance and earnings growing at 20% per year.

In terms of common stock and the securities industry, which of the following BEST describes the term "proxy"?

An abbreviation word used to describe a quotation that is approximate or is not "firm"

Which of the following would be paid last in terms of priority by a corporation ?

Dividend payments on a common stock

Risks or disadvantages that may arise form participation as a limited partner in a limited partner in a limited partnership generally include all of the following EXCEPT:

Examination of the program by the IRS as a possible "abusive shelter"

Equity Real Estate Investment Trusts will usually invest in which of the following ?

Income producing properties

Which of the following is a characteristic of common stock?

It represents equity ownership of a corporation

Which of the following investment choices would provide an investor the least liquidity?

Long-term convertible corporate bond

Which of the following is true of cumulative voting?

Minority shareholders have a better chance of electing a director of their choice.

If a preferred stock is "cumulative", it means that the stock?

Must pay all dividends in arrears prior to the payment of dividends on common stock.

A correct statement concerning the federal tax treatment of a "qualified" Real Estate Investment Trust (REIT) is that it is:

Must pay out a specified portion of its ordinary income as dividends

All of the following comments would NOT apply to holders of preferred stock Except:

Preferred shareholders typically see lower levels of price volatility that common shareholders

Common stock shareholders have all of the following rights EXCEPT:

Receive declared dividends

In a pre-emptive rights offering existing shareholders can do all of the following except

Redeem their rights for cash

A common stockholder in a corporate liquidation has a ?

Residual claim on the assets.

A customer wishing to exercise their preemptive rights should send the rights to the:

Rights agent