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Question 1 of 10
1. Question
Bill Smith owns 1,500 shares of ABC Corporation stock. It is time to vote for two board members. He has a total of 3,000 votes (1,500 shares × two board seats). If he had a cumulative vote:
Correct
If he had a cumulative vote, he could spread his votes any way he pleased, using all 3,000 votes on one candidate if he chooses.
Incorrect
If he had a cumulative vote, he could spread his votes any way he pleased, using all 3,000 votes on one candidate if he chooses.
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Question 2 of 10
2. Question
Which statement(s) is (are) correct regarding the rights of common stockholders?
I. A stockholder has the right to see a corporation’s balance sheet and income statements
II. A common stockholder can vote on stock splits and dividends
III. A common stockholder has a right to dividends if disbursed
IV. Common stockholders can hold claim to assets in case of the issuing company’s liquidation.Correct
These are common stockholder rights:
1.Access to corporate books: a stockholder has the right to see a cor-
poration’s balance sheet and incomestatements
2.Voting: a common stockholder can vote on stock splits anddividends
3.Share in dividends: a common stockholder has a right to dividends
ifdisbursed
4.Preemptive rights: right to buy shares before it is offered toothers
5.Residual claims on corporate assets: common stockholders can hold
claim to assets in case of the issuing company’sliquidation.Incorrect
These are common stockholder rights:
1.Access to corporate books: a stockholder has the right to see a cor-
poration’s balance sheet and incomestatements
2.Voting: a common stockholder can vote on stock splits anddividends
3.Share in dividends: a common stockholder has a right to dividends
ifdisbursed
4.Preemptive rights: right to buy shares before it is offered toothers
5.Residual claims on corporate assets: common stockholders can hold
claim to assets in case of the issuing company’sliquidation. -
Question 3 of 10
3. Question
When an issuing company wants to make a stock more interesting for an investor, it often chooses to-
Correct
When an issuing company wants to make a stock more interesting for an investor, it often chooses to split common stock
Incorrect
When an issuing company wants to make a stock more interesting for an investor, it often chooses to split common stock
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Question 4 of 10
4. Question
A 2-for-1 split of 100 shares of stock valued at $50 would give an investor-
Correct
A 2-for-1 split of 100 shares of stock valued at $50 would give an investor 200 shares of $25stock.
Incorrect
A 2-for-1 split of 100 shares of stock valued at $50 would give an investor 200 shares of $25stock.
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Question 5 of 10
5. Question
A 1-for-2 reverse split of 100 shares of $50 stock would result in-
Correct
A 1-for-2 reverse split of 100 shares of $50 stock would result in 50 shares of $100 stock.
Incorrect
A 1-for-2 reverse split of 100 shares of $50 stock would result in 50 shares of $100 stock.
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Question 6 of 10
6. Question
If an investor had $10,000 invested before the split, after a split that investor has-
Correct
If an investor had $10,000 invested before the split, that investor still has $10,000 total invested after a split.
Incorrect
If an investor had $10,000 invested before the split, that investor still has $10,000 total invested after a split.
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Question 7 of 10
7. Question
What kind of dividends companies will give their investors?
I. Stock dividend
II. Cash dividend
III. Stock & cash dividend
IV. Ex-dividendCorrect
Companies will give their investors two kinds of dividends:
•Stock dividend: the investor receives their dividends in stocks, which is
non-taxable.
•Cash dividend: the investor receives dividend in cash, which is taxable
and decreases the value of the stockIncorrect
Companies will give their investors two kinds of dividends:
•Stock dividend: the investor receives their dividends in stocks, which is
non-taxable.
•Cash dividend: the investor receives dividend in cash, which is taxable
and decreases the value of the stock -
Question 8 of 10
8. Question
In order to receive dividends, an investor must buy the stock at least-
Correct
In order to receive dividends, an investor must buy the stock at least three busi- ness days before the record date because a purchase takes three days to settle.
Incorrect
In order to receive dividends, an investor must buy the stock at least three busi- ness days before the record date because a purchase takes three days to settle.
-
Question 9 of 10
9. Question
XYZ Corporation has announced it will distribute dividends and set its record date on Tuesday, January 10. To receive dividends, an investor has to buy stock by end- of-trading-
Correct
XYZ Corporation has announced it will distribute dividends and set its record date on Tuesday, January 10. To receive dividends, an investor has to buy stock by end- of-trading Thursday, January 5.
Incorrect
XYZ Corporation has announced it will distribute dividends and set its record date on Tuesday, January 10. To receive dividends, an investor has to buy stock by end- of-trading Thursday, January 5.
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Question 10 of 10
10. Question
Which statement(s) is (are) correct regarding Straight preferred stock?
I. Straight preferred stock receives no accumulation of dividend if issuer does not paydividend.
II. If dividend is not paid, Straight preferred stock accumulates and is owed.
III. Straight preferred stock can be traded for common stock at any time.
IV. Straight preferred stock gives issuer the right to buy back preferred stock at anytime.Correct
Straight preferred stock: receives no accumulation of dividend if issuer does not pay dividend.
Incorrect
Straight preferred stock: receives no accumulation of dividend if issuer does not pay dividend.