Matching
Match the following with the items below:
Premises:
Stock issued to original owners of the company that often carry special voting privileges in excess of their proportionate ownership.
Rights offering made to existing shareholders for the sole purpose of making it more difficult for an outside firm to acquire the company.
These allow a company to force conversion from convertible preferred stock into convertible debt.
All income that is not paid out to creditors or preferred stockholders automatically belongs to common stockholders.
This is similar to floating rate preferred stock but is a short-term instrument that matures every seven weeks and is sold at a subsequent bidding.
Refers to the possibility of receiving additional dividend payments over and above the stated amount to be paid on this type of security.
Assures holders of this security that they will receive all dividends due to them before dividends are paid to other types of dividend-paying security holders.
Assigning voting rights to management, directors, or another outside group.
Type of equity security with an obligatory dividend paid at a rate that is adjusted periodically to reflect current market conditions.
Responses:
founders' shares
residual claim to income
Dutch auction preferred stock
cumulative preferred stock
convertible exchangeable preferreds
floating rate preferred stock
poison pill
proxy
participating preferreds
Correct Answer:
Premises:
Responses:
Stock issued to original owners of the company that often carry special voting privileges in excess of their proportionate ownership.
Rights offering made to existing shareholders for the sole purpose of making it more difficult for an outside firm to acquire the company.
These allow a company to force conversion from convertible preferred stock into convertible debt.
All income that is not paid out to creditors or preferred stockholders automatically belongs to common stockholders.
This is similar to floating rate preferred stock but is a short-term instrument that matures every seven weeks and is sold at a subsequent bidding.
Refers to the possibility of receiving additional dividend payments over and above the stated amount to be paid on this type of security.
Assures holders of this security that they will receive all dividends due to them before dividends are paid to other types of dividend-paying security holders.
Assigning voting rights to management, directors, or another outside group.
Type of equity security with an obligatory dividend paid at a rate that is adjusted periodically to reflect current market conditions.
Premises:
Stock issued to original owners of the company that often carry special voting privileges in excess of their proportionate ownership.
Rights offering made to existing shareholders for the sole purpose of making it more difficult for an outside firm to acquire the company.
These allow a company to force conversion from convertible preferred stock into convertible debt.
All income that is not paid out to creditors or preferred stockholders automatically belongs to common stockholders.
This is similar to floating rate preferred stock but is a short-term instrument that matures every seven weeks and is sold at a subsequent bidding.
Refers to the possibility of receiving additional dividend payments over and above the stated amount to be paid on this type of security.
Assures holders of this security that they will receive all dividends due to them before dividends are paid to other types of dividend-paying security holders.
Assigning voting rights to management, directors, or another outside group.
Type of equity security with an obligatory dividend paid at a rate that is adjusted periodically to reflect current market conditions.
Responses:
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