Finance chapter 7

A proxy statement is a statement transferring ________. a. the votes of a stockholder to another party
Which of the following is true of common stocks? . The common stock of a corporation can be either privately or publicly owned.
________ are promised a fixed periodic dividend that must be paid prior to paying any common stock dividends. a. Preferred stockholders
Which of the following is an advantage for a firm to issue common stock over long-term debt? c. no maturity date on which the par value of the issue must be repaid
From a corporation’s point of view, a disadvantage of issuing preferred stock is ________. a. that the dividends are not tax-deductible
Holders of equity capital ________. a. own the firm
A(n)________ is hired by a firm to find prospective buyers for its new stock or bond issue. c. investment banker
Which of the following is true of preferred stocks? d. Preferred stock with a conversion feature allows holders to change each share into a stated number of shares of common stock.
Which of the following is typically a feature of common stock? c. Common stocks may or may not pay dividends.
________ is a guide to a firm’s value if it is assumed that investors value the earnings of a given firm in the same way they do the average firm in the industry. c. The P/E multiple

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