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Reading 58: Overview of Equity Securities-LOS b 习题精选

Session 14: Equity Analysis and Valuation
Reading 58: Overview of Equity Securities

LOS b: Discuss the characteristics of various types of equity securities.

 

 

An equity security that requires the firm to pay any scheduled dividends that have been missed, before paying any dividends to common equity holders, is a:

A)
cumulative preference share.
B)
participating preference share.
C)
convertible preference share.


 

Cumulative preference shares (cumulative preferred stock) must receive any dividends in arrears before the firm may pay any dividends to common shareholders.

Two seats on a board of directors are to be elected. A voting system in which the owner of 100 shares may cast 100 votes in each of the board elections is a:

A)
cumulative voting system.
B)
proportional voting system.
C)
statutory voting system.


In a statutory voting system, a shareholder can vote in each separate board election based on the number of shares she owns. Under cumulative voting, the shareholder may choose to cast her total number of votes (200 in this example) for a candidate in one of the elections.

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