True/False
Indicate whether the
statement is true or false.
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1.
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Shares and stock refer to two different types of
financing arrangements for
corporations.
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2.
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Common stock entitles the owner to receive
dividends, if any are declared.
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3.
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Preferred stock gives the owner the right to
receive a specific amount of
common stock each year.
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4.
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Owners of common stock have top priority to
corporate assets in the event of
bankruptcy or corporate termination.
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5.
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Capital stock is a designation used for the stock
held by the corporate
directors.
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6.
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Controlling stock refers to the stock owned by a
specific stockholder that
amounts to a majority interest in the corporation.
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7.
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Convertible stocks give the owner the right to
change the stock into another
category.
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8.
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Par value is the value of corporate assets at the
end of the fiscal year.
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9.
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Preferred stock grants the owner a fixed
dividend.
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10.
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Whoever is the registered stock owner on the record
date is entitled to a
dividend, even if he or she no longer owns the stock.
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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11.
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A classification of stock that entitles the holder
to receive dividends when the
company declares a profit.
a. | Preferred stock | b. | Controlling stock | c. | Asset
stock | d. | Common stock |
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12.
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The right of common stockholders to purchase newly
issued stock to maintain
their overall percentage of ownership in a company.
a. | Asset allocation | b. | Dividend reinvestment program | c. | Preemptive rights | d. | Corporate
dividends |
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13.
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A class of stock that entitles the stockholder to a
stated dividend that must be
paid before any dividend payment is made to holders of common
stock.
a. | Preferred stock | b. | Holding stock | c. | Initial
stock | d. | Controlling stock |
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14.
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The name for the stock that represents the total
financial commitment by all
shareholders.
a. | Financialized stock | b. | Representative stock | c. | Capital
stock | d. | All of the above |
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15.
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This refers to the fact that an individual
investor’s rights are recorded with the
company.
a. | Registered stock | b. | Allocated stock | c. | Monetary
stock | d. | Comprehensive
stock |
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16.
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The type of stock owned by a specific stockholder
that amounts to a majority
interest in the corporation.
a. | Capital stock | b. | Accumulated stock | c. | Preferred
stock | d. | Controlling stock |
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17.
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An arbitrary value set on the price of an
individual share.
a. | Price | b. | Valuation | c. | Par
value | d. | Escrow amount |
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18.
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A share of profits or property; usually a payment
per share of the corporation's
stock, often paid on a quarterly basis.
a. | Declared value | b. | Bond | c. | Distribution | d. | Dividend |
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19.
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The date upon which specific stockholder rights are
fixed; for example, all
stockholders owning stock as of this date are entitled to receive a
dividend.
a. | Record date | b. | Annual report date | c. | Fiscal accounting
date | d. | SEC filing date |
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20.
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A stock that is registered under a
stockholder’s name and for which no stock
certificate issues.
a. | Stated date | b. | Book entry | c. | Annual
accounting | d. | Annual
report |
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