Question 1

A firm has 200,000 outstanding shares and 11 directors.Doug owns 15,500 shares of this firm.How many directors can Doug elect with cumulative voting?

Accepted Answer

The answer of A firm has 200,000 outstanding shares and...

Question 2

XYZ's rights currently trade at $7.60.Each right can be used to buy one share of XYZ at $27.92 based on a subscription ratio of 5 rights for each share purchased.XYZ's current cum rights share price is _______.

Accepted Answer

The answer of XYZ's rights currently trade at $7.60.Each right...

Question 3

Advantages that the American Depositary Receipts (ADRs)have over investing in actual shares of a foreign stock include all but the following;

Accepted Answer

The statement that ADRs have annual reports and financial statements presented in French, Spanish, and Mandarin is false. ADRs are issued by US depository banks and therefore have financial statements presented in a US GAAP or IFRS format. The other options are true advantages of investing in ADRs over actual foreign stocks.

Question 4

If SED's shares trade ex-rights at $51.75,carry a subscription price of $48 a share,and can be purchase by shareholders in a ratio of 5 rights per share,SED's rights trade at ______.

Accepted Answer

The answer of If SED's shares trade ex-rights at $51.75,carry...

Question 5

A "poison pill":

Accepted Answer

A poison pill is a strategy used by a company to prevent or discourage hostile takeovers by making the company less attractive to the acquiring company. It can include tactics such as issuing new shares of stock to existing shareholders, making the acquisition of a large number of shares prohibitively expensive, or making the company less attractive in other ways such as by taking on excessive debt. While a poison pill may protect current shareholders, it can also limit the potential for maximizing shareholder value by discouraging potential high takeover bids.

Question 6

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

Accepted Answer

The answer of Preferred stock is the most used of...

Question 7

American Depositary Receipts (ADRs)are:

Accepted Answer

The answer of American Depositary Receipts (ADRs)are:
...

Question 8

SED Corporation's shares are currently trading at $52.50.Shareholders have the right to buy 1 share of SED for every 5 rights they own at a price of $48.00.SED's rights trade at $_________?

Accepted Answer

The answer of SED Corporation's shares are currently trading at...

Question 9

To the corporate investor,common stock offers which of the following advantages?

Accepted Answer

The answer of To the corporate investor,common stock offers which...

Question 10

A stock sells for $50 rights-on,the subscription price is $40.Nine rights are required to purchase one share.The value of a right is:

Accepted Answer

The answer of A stock sells for $50 rights-on,the subscription...

Question 11

Preferred stock is often sold by companies:

Accepted Answer

Preferred stock is often sold by companies as a way to raise capital without incurring contractual debt obligation. This is because preferred stock represents an ownership stake in the company, but does not come with the same legal obligations as debt. Additionally, preferred stock may be more attractive to certain investors who are seeking stable income streams, as the dividends paid on preferred stock are typically higher and more predictable than those paid on common stock.

Question 12

Corporation A is issuing preferred stock yielding 9%,and Corporation B is considering buying the stock.Corp A's tax rate is 23% and Corp B's tax rate is 39%.What is the aftertax preferred yield for Corp A?

Accepted Answer

The answer of Corporation A is issuing preferred stock yielding...

Question 13

You are a shareholder in Trees N Things (TNT)and you would like to elect 6 of the 11 members of the Board of Directors.If there are 3.5 million shares outstanding what is the minimum number of shares required to elect your slate of directors under cumulative voting?

Accepted Answer

The answer of You are a shareholder in Trees N...

Question 14

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:

Accepted Answer

The answer of Nine rights are necessary to purchase one...

Question 15

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 group already owns 400,000 shares.)

Accepted Answer

The answer of Given that there are 6,000,000 shares outstanding...

Question 16

Which of the following are benefits of a rights offering?

Accepted Answer

Rights offerings are a way for a company to raise capital by offering existing shareholders the right to buy additional shares at a discounted price. This can be an attractive option for investors who want to maintain their ownership percentage in the company while also increasing their investment. Rights offerings do not directly affect return on equity or debt to equity ratios, and they may dilute earnings per share if the new shares are issued at a lower price than the current market price. However, the primary benefit of a rights offering is the ability to raise capital for the firm.

Question 17

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

Accepted Answer

Cumulative voting allows shareholders to concentrate all of their votes on one candidate, giving minority shareholders a better chance of being represented on the board of directors. Option A is incorrect because cumulative voting allows shareholders to vote for multiple directors. Option B is incorrect because cumulative voting actually gives minority shareholders a better chance of being represented on the board. Option D is incorrect because cumulative voting allows shareholders to add up their votes for a single candidate based on the number of shares they own, not add one vote for every share owned.

Question 18

American Depositary Receipts:

Accepted Answer

American Depositary Receipts are more liquid and less expensive to buy than foreign stock, as they allow American investors to invest in foreign companies without the need to directly purchase the foreign company's stock on a foreign exchange. ADRs also have annual reports and pay dividends in US dollars.

Question 19

Davis Aquatic Corp.has 300,000 shares of preferred stock outstanding that is cumulative.The dividend is $8.00 per share and has not been paid for 2 years.If Davis Aquatic Corp.retained earnings and after tax income this year total $3 million,what could be the maximum payment to the preferred shareholders on a per share basis?

Accepted Answer

The answer of Davis Aquatic Corp.has 300,000 shares of preferred...

Question 20

American Depositary Receipts:

Accepted Answer

American Depositary Receipts (ADRs) have annual reports and financial statements presented in English, making it easier for American investors to understand and analyze the company's financial health.

Quiz 17: Common and Preferred Stock Financing

A firm has 200,000 outstanding shares and 11 directors.Doug owns 15,500 shares of this firm.How many directors can Doug elect with cumulative voting?

XYZ's rights currently trade at $7.60.Each right can be used to buy one share of XYZ at $27.92 based on a subscription ratio of 5 rights for each share purchased.XYZ's current cum rights share price is _______.

Advantages that the American Depositary Receipts (ADRs) have over investing in actual shares of a foreign stock include all but the following;

If SED's shares trade ex-rights at $51.75,carry a subscription price of $48 a share,and can be purchase by shareholders in a ratio of 5 rights per share,SED's rights trade at ______.

A "poison pill":

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

American Depositary Receipts (ADRs) are:

SED Corporation's shares are currently trading at $52.50.Shareholders have the right to buy 1 share of SED for every 5 rights they own at a price of $48.00.SED's rights trade at $_________?

To the corporate investor,common stock offers which of the following advantages?

A stock sells for $50 rights-on,the subscription price is $40.Nine rights are required to purchase one share.The value of a right is:

Preferred stock is often sold by companies:

Corporation A is issuing preferred stock yielding 9%,and Corporation B is considering buying the stock.Corp A's tax rate is 23% and Corp B's tax rate is 39%.What is the aftertax preferred yield for Corp A?

You are a shareholder in Trees N Things (TNT) and you would like to elect 6 of the 11 members of the Board of Directors.If there are 3.5 million shares outstanding what is the minimum number of shares required to elect your slate of directors under cumulative voting?

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:

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 group already owns 400,000 shares.)

Which of the following are benefits of a rights offering?

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

American Depositary Receipts:

American Depositary Receipts: