1) Dividends in arrears that must be paid to the preferred stockholders before payment of dividends to common stockholders are
Select one:
a. convertible
b. cumulative
c. noncumulative
d. participating
2) Which of the following is usually a right of a preferred stockholder?
Select one:
a. Right to sue company in bankruptcy proceedings if promised preferred dividends are not paid.
b. Right to receive dividend payments before any dividends are paid to common stockholders.
c. Right to convert shares of common stock on demand.
d. Preemptive right to participate in the issuance of new common shares.
3) Another term sometimes applied to common stockholder is a
Select one:
a. residual owner of the firm.
b. reciprocal owner of the firm.
c. net owner of the firm.
d. fundamental or basic owner of the firm.
4) Because equity holders are the last to receive any distributions of assets as a result of bankruptcy proceedings, common stockholders expect
Select one:
a. warrants to be attached to the stocks as a sweetener.
b. greater compensation in the form of dividends and/or rising stock prices.
c. fixed dividends payments.
d. all profits to be paid out in dividends.
5) Preferred stock is valued as if it were a
Select one:
a. fixed-income obligation.
b. bond.
c. common stock.
d. perpetuity.
6) Economically rational buyers and sellers use their assessment of an asset
1) Dividends in arrears that must be paid to the preferred stockholders before payment of dividends to common stockholders are
Select one:
a. convertible
b. cumulative
c. noncumulative
d. participating
2) Which of the following is usually a right of a preferred stockholder?
Select one:
a. Right to sue company in bankruptcy proceedings if promised preferred dividends are not paid.
b. Right to receive dividend payments before any dividends are paid to common stockholders.
c. Right to convert shares of common stock on demand.
d. Preemptive right to participate in the issuance of new common shares.
3) Another term sometimes applied to common stockholder is a
Select one:
a. residual owner of the firm.
b. reciprocal owner of the firm.
c. net owner of the firm.
d. fundamental or basic owner of the firm.
4) Because equity holders are the last to receive any distributions of assets as a result of bankruptcy proceedings, common stockholders expect
Select one:
a. warrants to be attached to the stocks as a sweetener.
b. greater compensation in the form of dividends and/or rising stock prices.
c. fixed dividends payments.
d. all profits to be paid out in dividends.
5) Preferred stock is valued as if it were a
Select one:
a. fixed-income obligation.
b. bond.
c. common stock.
d. perpetuity.
6) Economically rational buyers and sellers use their assessment of an asset
