Financial Instruments Paper 5

1

Preferred and common stock differ in that






2

Unless the shares are specifically restricted, a holder of common stock with a preemptive right may share proportionately in all of the following except






3

Which of the following is usually not a feature of cumulative preferred stock?






4

Which one of the following statements is correct regarding the effect preferred stock has on a company?






5

Preferred stock may be retired through the use of any one of the following except a






6

All of the following are characteristics of preferred stock except that






7

Which one of the following describes a disadvantage to a firm that issues preferred stock?






8

Which one of the following situations would prompt a firm to issue debt, as opposed to equity, the next time it raises external capital?






9

A company had 150,000 shares outstanding on January 1. On March 1, 75,000 additional shares were issued through a stock dividend. Then on November 1, the company issued 60,000 shares for cash. The number of shares to be used in the denominator of the EPS calculation for the year is






10

Everything else being equal, a highly leveraged firm will have earnings per share. List A List B






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