11) Preferred stock is considered to be non-participating when:
A) preferred stockholders get their yearly dividend and the reminder goes to common stockholders.
B) preferred stockholders have a right to the current year's dividend, but do not receive holdovers from past years when dividends were not paid.
C) preferred stockholders have a right to a certain dividend every year.
D) None of these answers is correct.
12) If only one type of stock is issued, it is:
A) no-par preferred stock.
B) preferred stock.
C) legal capital.
D) common stock.
13) Dividends in arrears occur when the company does NOT pay dividends to:
A) cumulative preferred stockholders.
B) non-cumulative preferred stockholders.
C) participating preferred stockholders.
D) non-participating common stockholders.
14) Par value represents:
A) the market value of the stock.
B) an arbitrary value that is placed on each share of stock.
C) the legal capital of the corporation.
D) Both B and C are correct.
15) Corporations can issue:
A) par value shares.
B) no-par value shares.
C) stated value shares.
D) All of these answers are correct.
16) Voting rights are a characteristic of which type stock?
A) Common but not preferred
B) Preferred but not common
C) Both common and preferred
D) Neither common nor preferred
17) An amount determined by the corporation board of directors and assigned to no-par value stock is:
A) par value.
B) stated value.
C) book value.
D) market value.
18) A share of stock may be sold at any given time according to the stock's:
A) stated value.
B) book value.
C) market value.
D) par value.
19) Each share of capital stock of a corporation gives its owner the right to:
A) manage the daily operations of the business.
B) set company policy.
C) vote at stockholders' meetings.
D) determine the amount of dividends to be paid.
20) Cox Corporation has issued 2,000 shares of stock. Janis owns 500 shares. If the corporation issues an additional 500 shares, how many shares does Janis have the preemptive right to purchase?
A) 100 shares
B) 125 shares
C) 250 shares
D) 500 shares
