Question 1

Under normal operating conditions, the board of directors is elected by

Accepted Answer

A)  the common stockholders. 
B)  the preferred stockholders. 
C)  the bondholders. 
D)  two of the options are true. 
A)  the common stockholders. 
B)  the preferred stockholders. 
C)  the bondholders. 
D)  two of the options are true.

Question 2

Due to the 2017 Tax Cuts and Jobs Act, for companies owning less than 20 percent of another company, the tax exclusion was reduced from 70 to 50 percent.

Accepted Answer

A) True 
 B)False

Question 3

A proxy is

Accepted Answer

A)  a device for circumventing regular voting procedures. 
B)  a coupon attached to each share of stock and used by the shareholder in casting their vote on current issues. 
C)  an authorization of a registered stockholder to another person to act in their place at the meeting. 
D)  a warrant allowing a stockholder to purchase a specified number of additional shares at a given price. 
A)  a device for circumventing regular voting procedures. 
B)  a coupon attached to each share of stock and used by the shareholder in casting their vote on current issues. 
C)  an authorization of a registered stockholder to another person to act in their place at the meeting. 
D)  a warrant allowing a stockholder to purchase a specified number of additional shares at a given price.

Question 4

Which of the following is NOT true about preferred stock?

Accepted Answer

A)  70% of dividends are nontaxable to other corporations that hold preferred stock. 
B)  The after-tax cost is higher than debt with the same yield. 
C)  Dividends are legal obligations of the firm. 
D)  Preferred stocks are typically cumulative with respect to dividends. 
A)  70% of dividends are nontaxable to other corporations that hold preferred stock. 
B)  The after-tax cost is higher than debt with the same yield. 
C)  Dividends are legal obligations of the firm. 
D)  Preferred stocks are typically cumulative with respect to dividends.

Question 5

"Preemptive rights" means that

Accepted Answer

A)  existing shareholders can prevent management from issuing additional common stock. 
B)  common shareholders can "preempt" preferred shareholders for dividends. 
C)  existing shareholders are guaranteed an opportunity to retain their proportional share of ownership. 
D)  management can preempt the right of shareholders to receive dividends if earnings are down. 
A)  existing shareholders can prevent management from issuing additional common stock. 
B)  common shareholders can "preempt" preferred shareholders for dividends. 
C)  existing shareholders are guaranteed an opportunity to retain their proportional share of ownership. 
D)  management can preempt the right of shareholders to receive dividends if earnings are down.

Under normal operating conditions, the board of directors is elected by

Due to the 2017 Tax Cuts and Jobs Act, for companies owning less than 20 percent of another company, the tax exclusion was reduced from 70 to 50 percent.

A proxy is

Which of the following is NOT true about preferred stock?

"Preemptive rights" means that

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

Exam 17: Common and Preferred Stock Financing

Under normal operating conditions, the board of directors is elected by

Due to the 2017 Tax Cuts and Jobs Act, for companies owning less than 20 percent of another company, the tax exclusion was reduced from 70 to 50 percent.

A proxy is

Which of the following is NOT true about preferred stock?

"Preemptive rights" means that

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