Deck 33: Ownership of a Corporation

Question 1

Common stockholders do not possess the right to a share of the assets of a corporation on dissolution.

Answer 1

False

Question 2

The of a corporation is the declared money value of its outstanding stock. ​

A)preferred stock
B)inventory stock
C)treasury stock
D)capital stock

Answer 2

D

Question 3

Once the directors of a corporation declare a cash dividend, it cannot later be rescinded.

Answer 3

True

Question 4

Which of the following is required by the Securities Investor Protection Act of 1970?

A)Registered dealers must contribute to a fund to compensate customers of failed investment houses.
B)Corporations must make periodic disclosure statements regarding their financial structure.
C)Insiders must make certain disclosures.
D)Anyone offering a new issue of securities for sale to the public must register it with the SEC.

Question 5

Which of the following is true about par-value stock?

A)The par value of the stock must equal the value of money, property, or services received by the corporation.
B)The par value of the stock must equal the value of money, property, or services received by the stockholder who sells it.
C)Common stock usually has a par value.
D)When sold by a corporation at a discount the corporation is liable to make up the discount.

Question 6

Which of the following is true of restrictions on the sale of a private corporation's stock?

A)Such restrictions are not common.
B)Restrictions on the sale of stock are not binding on stockholders.
C)They frequently require a stockholder to offer to sell the stock to the corporation or other shareholders.
D)They mean the holder has no right to any distribution that represents a share of the profits.

Question 7

Cumulative preferred stock is preferred stock on which dividends have to be paid only for the current year before common stock dividends are paid.

Question 8

Preferred stockholders may receive a preference as to dividends, assets or both.

Question 9

Which of the following is true of dividends paid to shareholders?

A)Dividends can be paid in the form of property manufactured by another organization.
B)Cash dividends can be declared and then rescinded by the directors.
C)Dividends can be paid with stock a corporation owns in another company.
D)Stock dividends cannot be rescinded once declared.

Question 10

What is the purpose of blue-sky laws? Explain. ​

Question 11

A stock option may be exercised at any point during the stated period of time in the contract.

Question 12

The federal Securities Act regulates the sale of securities in interstate commerce.

Question 13

A publicly traded corporation is required to follow the regulations as set forth in the Securities Exchange Act of 1934.

Question 14

A person may obtain shares of stock by subscription only after a corporation is organized. ​

Question 15

is preferred stock on which all dividends must be paid before the common stock receives any dividend.

A)Par value preferred stock
B)Participating preferred stock
C)Noncumulative preferred stock
D)Cumulative preferred stock

Question 16

Which of the following best describes a prospectus?

A)It is a document relating to purchase and subsequent resale of company assets and intellectual property.
B)It is a document containing specified information about a stock offering and the corporation.
C)It is a document pertaining to the conduct regulations of the company.
D)It is a document containing information relating to the bylaws of the company.

Question 17

Which of the following best describes a share?

A)It is the unit value of a company's total stock.
B)It the unit value of a company's liabilities.
C)It is the total value of a company's assets.
D)It is total value of a company's liabilities.

Question 18

Stock preferred as to assets gives the holder an advantage only in the event of liquidation.

Question 19

The fact a person is named on a stock certificate is prima facie evidence that person is the owner.

Question 20

A cash dividend may be paid out of paid-in surplus.