CH 1 series 66

Benefits of owning Common stock:

-historical hedging against inflation -liquidity -voting rights -dividend payout

Only ___ stock has preemptive rights and the potential for growth to keep pace with inflation.

Common

For a profitable and rapidly growing firm, holders of preference shares are least likely to benefit from the firm's growth if the preference shares are: Cumulative / Convertible / Participating ?

Cumulative

The SEC rule that sets the requirements for selling / purchasing restricted, unregistered or control stock is ____.

SEC Rule 144

This rule applies to the sale of unregistered securities owned by affiliates or nonaffiliates and the sale of control stock. It does not apply to the sale of registered securities by nonaffiliated persons.

SEC Rule 144

Cumulative Preferred stock

requires thats dividends in arrears "accumulate" & must be paid, in addition to the current year's dividends before any CS shareholders receive dividend payment.

The ___ right of common shareholders refers to their positioning in claiming rights in the event of bankruptcy. wages > taxes > creditors > preferred shareholders> CS shareholders

residual