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BUL 5810 – CORPORATIONS Test 2 with Questions and 100% Correct Answers
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BUL 5810 – CORPORATIONS Test 2 with Questions and 100% Correct Answers
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BUL 5810 – CORPORATIONS Test2 with Questions and 100% Correct
Answers
Which of the following is correct with regard to common stock? - Answer
Common stock does not have any special contract rights or preferences
__________, usually called debentures, have only the obligation of the
corporation behind them. - Answer Unsecured bonds
Par value: - Answer is the minimum price at which the corporation may sell the
stock at issuance
The board of directors cannot declare dividends when the corporation: - Answer
is insolvent
, A corporation's proportional distribution of additional shares of the corporation's
capital stock to its shareholders is a: - Answer stock or share dividend
What are the principal sources for corporate financing? - Answer Debt
Equity Investment Securities
Retained Earnings
The most customary type of dividend is a: - Answer cash dividend
Which of the following determines when to declare dividends and in
what amount? - Answer Board of Directors
All states impose a "cash flow test" on the payment of dividends or other
distributions. The "cash flow test" is also known as the: - Answer Equity Solvency
Test
State laws that regulate the issuance and sale of securities are known as: -
Answer Blue sky Laws
The Ajax Corporation issues bonds that pay a minimum of 6% interest but that
can pay more if corporate earnings reach certain specified levels. The holder of
the bond may exchange it for stock of the corporation. This bond would be a: -
Answer convertible bond
Allen owns 200 of the 1,000 shares outstanding of General Myopics. GM plans to
issue 1,000 new shares. If Allen has preemptive rights, he may buy: - Answer 200
shares at the new stock price
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