Description

QUESTION 1

1. When common stock owners have a residual claim, this means:

	A.	They have the right to claim additional shares in an issue of new stock or bonds.
	B.	All voting power resides with them.
	C.	They have a claim to all earnings after bond interest and preferred dividends are paid.
	D.	All of the above

1 points   

QUESTION 2

1. Preferred stock generally:

	A.	Pays a fixed dividend rate
	B.	Increases in value more with the company’s common stock
	C.	Pays a variable dividend rate depending on the company’s earnings
	D.	Are safer investments than the company’s bonds

1 points   

QUESTION 3

1. Preferred shareholders’ claims on the assets and income of a company come  _____ those of bond holders and _____ those of stockholders.

	A.	before; after
	B.	before; before
	C.	after; after
	D.	after; before

1 points   

QUESTION 4

1. A blue-chip stock is:

	A.	A high-growth stock that pays no dividend
	B.	A low-risk stock that consistently rewards stockholders with solid dividends and/or good growth
	C.	A low-risk stock that pays no dividends
	D.	A stock that pays a high dividend and has above-average risk

 

 

 

1 points   

QUESTION 5

1. Common stock is considered:

	A.	More risky than preferred stock
	B.	Equivalent risk to preferred stock
	C.	Less risky than bonds
	D.	Less risky than preferred stock