package 21 videos/quiz

In general, common stockholders experience

greater risk and greater potential rewards than preferred stockholders.

Normally companies sell stock for an amount that is

more than the par value.

The number of shares a corporation has outstanding may exceed the number of shares authorized. This statement is

false.

Which of the following is not a date associated with the declaration and payment of dividends?

Date of purchase

Which of the following is not a potential benefit from owning common stock?

Risk minimization

Which of the following is not a common characteristic associated with preferred stock?

Voting rights

Based on normal market reaction, the market price of stock will

decrease if actual earnings are less than expected earnings.

The market price of common stock is based on investors' expectations about future earnings. This statement is

true.

The par value or stated value of stock represents the amount of legal capital that a corporation must maintain for the protection of the creditors. This statement is

true.