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1

Which of the following is not a right of a common shareholder?
A)Vote for directors and on key issues
B)Participate in dividends
C)Share in the distribution of assets during liquidation
D)Manage day-to-day operations
2

The legal capital of stock is also known as:
A)Callable value
B)Par value
C)Tender value
D)Ultra-virus value
3

Most preferred stock have the following distinctive features, except:
A)Cumulative dividend rights
B)Callable at option of the corporation
C)Preferred over common stockholders as to dividends
D)The right to vote
4

Convertible preferred stock may be converted to common stock, at the option of the:
A)Common stockholder
B)Preferred stockholder
C)Corporation
D)Corporation and stockholder jointly
5

In transaction in which stock is exchanged for an asset, the transaction should be recorded at:
A)The fair value of the asset
B)The market value of the stock
C)The fair value of the asset or the market value of the stock - whichever can be determined more objectively.
D)The legal value of the stock
6

When a corporation has a stock split, the total value of its shareholders' equity:
A)Declines
B)Increases
C)Remains the same
D)May increase or decrease depending upon the type of split
7

Treasury stock:
A)Is an asset
B)Increases total stockholders' equity
C)Decreases total stockholders' equity
D)Does not change total stockholders' equity
8

When treasury stock is reissued:
A)A gain or loss on the income statement may result
B)Only a loss is reflected on the income statement
C)Treasury stock must be reissued at original cost, therefore no gain or loss is recognized
D)Any difference between cost and reissuance price is reflected in the shareholders' equity section of the balance sheet
9

In calculating earnings per share:
A)The numerator is increased for preferred dividends
B)The numerator is decreased for preferred dividends
C)The numerator is increased for preferred and common dividends
D)The numerator is decreased for preferred and common dividends
10

An underwriter:
A)Handles the liquidation of a company
B)Handles the sale of stock to the public
C)Determines the dividends to be paid
D)Has nothing to do with business situations





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