Exam 17: Common and Preferred Stock Financing

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Given that there are 6,000,000 shares outstanding in a corporation, how many additional shares will be required for a minority group of shareholders to elect 4 of the 14 members on the board of directors? (Assume cumulative voting required. Assume the company already owns 400,000 shares.)

(Multiple Choice)

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Question 21

American Depository Receipts

(Multiple Choice)

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Question 22

Which of the following statements is true with respect to cumulative voting?

(Multiple Choice)

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Question 23

Firm X has 150,000 outstanding shares and 9 directors. Joe Stone owns 37,500 shares of firm X. How many directors can Joe elect with cumulative voting?

(Multiple Choice)

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Question 24

A preferred stock issue contains a number of stipulations and provisions that define the shareholder's claim to income and assets. List and briefly describe these stipulations and provisions.

(Essay)

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Question 25

If the market value of a stock when the shares are trading ex-rights is $57 and 9 rights are required to buy one share of stock at the subscription price of $45, then the rights are worth $1.33.

(True/False)

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Question 26

The floating rate feature on preferred stock allows the shareholders

(Multiple Choice)

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Question 27

Which of the following is not a very common feature of preferred stock?

(Multiple Choice)

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Question 28

Since the late 1970s preferred stock has been trading at slightly higher yields than comparable bonds.

(True/False)

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Question 29

If a preferred stock is of the cumulative type

(Multiple Choice)

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Question 30

Define and describe the characteristics of American Depository Receipts (ADRs).

(Essay)

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Question 31

Which of the following is not true about rights trading on organized exchanges?

(Multiple Choice)

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Question 32

Preferred stock is the most used of all long-term securities because

(Multiple Choice)

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Question 33

Which of the following actions will provide the shareholders with the most total wealth when a company makes a rights offering?

(Multiple Choice)

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Question 34

Ten rights are necessary to purchase one share of stock $84. A right sells for $6.30. The ex-rights value of the stock is

(Multiple Choice)

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Question 35

Participating preferred stock is advantageous to common shareholders.

(True/False)

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Question 36

The purpose of cumulative voting is

(Multiple Choice)

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Question 37

The subscription price is generally _ than the rights-on price and _ than the ex-rights price.

(Multiple Choice)

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Question 38

American Depository Receipts

(Multiple Choice)

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Question 39

Nine rights are necessary to purchase one share of stock $99. A right sells for a $7.70. The ex-rights value of the stock is

(Multiple Choice)

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Question 40

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Exam 17: Common and Preferred Stock Financing

Given that there are 6,000,000 shares outstanding in a corporation, how many additional shares will be required for a minority group of shareholders to elect 4 of the 14 members on the board of directors? (Assume cumulative voting required. Assume the company already owns 400,000 shares.)

American Depository Receipts

Which of the following statements is true with respect to cumulative voting?

Firm X has 150,000 outstanding shares and 9 directors. Joe Stone owns 37,500 shares of firm X. How many directors can Joe elect with cumulative voting?

A preferred stock issue contains a number of stipulations and provisions that define the shareholder's claim to income and assets. List and briefly describe these stipulations and provisions.

If the market value of a stock when the shares are trading ex-rights is $57 and 9 rights are required to buy one share of stock at the subscription price of $45, then the rights are worth $1.33.

The floating rate feature on preferred stock allows the shareholders

Which of the following is not a very common feature of preferred stock?

Since the late 1970s preferred stock has been trading at slightly higher yields than comparable bonds.

If a preferred stock is of the cumulative type

Define and describe the characteristics of American Depository Receipts (ADRs).

Which of the following is not true about rights trading on organized exchanges?

Preferred stock is the most used of all long-term securities because

Which of the following actions will provide the shareholders with the most total wealth when a company makes a rights offering?

Ten rights are necessary to purchase one share of stock $84. A right sells for $6.30. The ex-rights value of the stock is

Participating preferred stock is advantageous to common shareholders.

The purpose of cumulative voting is

The subscription price is generally _______ than the rights-on price and _______ than the ex-rights price.

American Depository Receipts

Nine rights are necessary to purchase one share of stock $99. A right sells for a $7.70. The ex-rights value of the stock is

The Goals and Activities of Financial Management

Review of Accounting

Financial Analysis

Financial Forecasting

Operating and Financial Leverage

Working Capital and the Financing Decision

Current Asset Management

Sources of Short-Term Financing

The Time Value of Money

Valuation and Rates of Return

Cost of Capital

The Capital Budgeting Decision

Risk and Capital Budgeting

Capital Markets

Investment Banking: Public and Private Placement

Long-Term Debt and Lease Financing

Dividend Policy and Retained Earnings

Convertibles, Warrants and Derivatives

External Growth Through Mergers

International Financial Management

Filters

The subscription price is generally _ than the rights-on price and _ than the ex-rights price.