conceptSM_ch15

conceptSM_ch15 - CONCEPT QUESTIONS CHAPTER 15 15.1 What is...

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CONCEPT QUESTIONS - CHAPTER 15 15.1 What is a company's book value? It is the sum of the common shares, capital surplus and accumulated retained earnings. What rights do stockholders have? 1. Voting rights for board members 2. Proxy rights 3. Asset Participation in case of liquidation 4. Voting rights for mergers and acquisitions 5. Preemptive rights to new shares issued. What is a proxy? It is the grant of authority by a shareholder to someone else to vote his or her shares. Why do firms issue nonvoting shares? How are they valued? Management of a firm can raise equity capital by issuing non-voting or limited- voting stock while maintaining control. Market prices of U.S. stocks with superior voting rights were found to be about 5 percent higher than the prices of otherwise identical stocks. 15.2 What is corporate debt? Describe its general features. Corporate debt is a security issued by corporations as a result of borrowing money and represents something that must be repaid. Its main features are:
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This note was uploaded on 03/17/2009 for the course ACTSC 371 taught by Professor Wood during the Fall '08 term at Waterloo.

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conceptSM_ch15 - CONCEPT QUESTIONS CHAPTER 15 15.1 What is...

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