FIN 320 (53 Questions and Answers ) 2024 Update
1. Which of the following is true of classes of common stock? ** Answ** -The classes of common stock often have unequal voting rights.
-A primary reason for creating more than one class of stock is to maintain control.
2. Which of the follo...
FIN 320 (53 Questions and Answers ) 2024 Update
1. Which of the following is true of classes of common stock? ** Answ** -The
classes of common stock often have unequal voting rights.
-A primary reason for creating more than one class of stock is to maintain control.
2. Which of the following are true of dividends? ** Answ** -They are taxable to
individual shareholders.
a. -They are paid at the discretion of the board of directors.
3. What right does a proxy give to a shareholder? ** Answ** the right to vote on
behalf of another shareholder
4. True or false: All classes of stock issued by a firm must have equal voting rights.
** Answ** False
5. Payments to shareholders that represent a return on the capital contributed to
the corporation are referred to as ** Answ** Dividends
6. Identify the two types of preferred dividends: ** Answ** cumulative and
noncumulative
7. If there are nine directors to be elected, what is the least number of shares you
will need to guarantee a seat on the board under cumulative voting? ** Answ**
10 percent of the stock plus 1 share
8. A written authorization for one shareholder to vote the stock of another
shareholder is called a(n) ** Answ** Proxy
9. Which of the following statements are true of cumulative preferred dividends?
(Select all that apply.) ** Answ** -Preferred
-They cared
10. ______ refers to the stream of customer orders to buy and sell stocks. **
Answ** Order Flow
11. When directors elected by common shareholders defer preferred dividends
indefinitely, ** Answ** common shareholders must also forego dividends
12. Electronic communication networks increase ____ and ____ in a market. **
Answ** liquidity; competition
13. The business of the NYSE is to attract ______. ** Answ** Order flow
14. The two most important stock markets in the United States are the New York
Stock Exchange and ** Answ** Nasdaq
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