Finance Exam 3

Which of the following is not a true statement? Common stockholders are legally entitled to some dividend
A major desire of stockholders regarding dividend policy is: Dividend stability
Which of the following best represents the hierarchy of creditor and stockholder claims? Senior secured debt, subordinated debt, common stock
Which of the following balance sheet accounts will be affected by a stock dividend buy not by a stock split? Retained Earnings
The “call” provision on some bonds allows: The corporation to redeem the bonds earlier than maturity but usually for a premium over the par value.
Prices of existing bonds move __________ as market interest rates move __________. up, down
Advantages that the American Depository Receipts (ADRs) have over investing in actual shares of a foreign stock include all but the followng: ADR’s are an effective barrier to foreign currency risk.
Which of the following is the lowest in priority of claims against a bankrupt firm? Common stock
Which one of these conditions must be met for a lease to qualify as a capital lease? The lease contains a bargain purchase price at the end of the lease
Which of the following is not true about the life cycle growth and dividend policy? In the development stage, a firm usually pays stock dividends and some low cash dividend.
Bond refunding occurs when: the sinking fund has accumulated enough money to retire the bond issue
A rights offer made to existing shareholders with the sole purpose of making it more difficult for another firm to acquire the company is called: a poison pill

Leave a Reply

Your email address will not be published. Required fields are marked *