Unit 1 - Questions

Among the benefits of owning common stock are I. historical hedging against inflation II. voting rights III. access, as owners, to information about corporate earnings before the general public IV. dividends

I, II, and IV

owners of a corporation's equity securities

have limited liability

holders of each of the following are creditors except

investors owning preferred stock

which of the following statements about restricted stock is correct?

volume limits generally apply to sales by control (affiliated) persons

which two of the following risks would be of greatest concern to the holder of an ADR? I. currency II. liquidity III. market IV. purchasing power

I and III

a company that has issued cumulative preferred stock

pays past and current preferred dividends before paying dividends on common stock

an investor who has purchased preferred stock with the goal of receiving steady quarterly income would be the most interested in the

ability of the company to continue paying the stated dividend

ADRs are used to facilitate

domestic trading of foreign securities

four years ago, Susan was granted enough nonqualified stock options (NQSOs) to purchase 500 shares of her employer's stock at $20 per share. Assuming Susan exercised all of her options when the FMV of the stock is $30 per share, and her ordinary income tax rate is 28%, how much income tax will be due?

$1,400

an investor owns 15% of the stock of a publicly traded company. this investor's spouse owns 5% of the stock of the same company. if the spouse wishes to sell the shares representing that 5% ownership, which of the following statements are true? I. both the investor and the spouse are control persons II. the investor is a control person, while the spouse is not III. the spouse must file a Form 144 IV. the investor must file a Form 144

I and III

limited liability regarding ownership in a US corporation means all of the following except

investors might lose more than the amount of their investment

which of the following statements regarding rights is true?

preferred stockholders would not generally receive preemptive rights