Chapter 15 MC - CHAPTER FIFTEEN Multiple Choice Questions...

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CHAPTER FIFTEEN Multiple Choice Questions 15-1. Which of the following statements about residual income is not accurate? a. it is income left over after other claimants of the firm have been paid b. it is usually paid out in the form of a cash dividend to both common and preferred stockholders c. it can be reinvested in the firm d. it can be reinvested in the firm and paid in the form of dividends to common stockholders 15-2. Target stock: a. is a class of common stock with no voting rights b. is a class H common stock c. represents a claim on a specific, usually new, part of the firm d. represents a cumulative stock 15-3. Which of the following is not true about privately held corporations? a. they are also known as closely held corporations b. they are traded on the organized over-the-counter market c. they do not report financial information to the government d. they are usually small 15-4. The board of directors of a publicly traded company: a. is elected by the common stockholders b. is part of the professional management team c. is appointed by the CEO d. is typically a figurehead position only 15-5. The legal and ethical duty to act in the best interest of the person that entrusted you with property or power is called: a. institutional responsibility b. fiduciary responsibility c. entrusted professional responsibility d. board of directors elected responsibility 177
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15-6. Most of the common stock of large publicly traded corporations is owned by: a. other publicly traded corporations b. individuals c. the government d. institutions 15-7. A controlling interest in the firm is represented by what percentage ownership of the common stock? a. 51% or more b. 50% or more c. 75% or more d. any % may be controlling depending on the distribution of remaining shares 15-8. A proxy is best described as: a. a warrant attached to your stock b. an authorization for someone else to vote for you c. a new stock issue d. a substitute voter for the board of directors 15-9. Which of the following voting rules favors the minority stockholder? a. cumulative voting rules b. majority voting rules c. proxy voting rules d. minority voting rules 15-10. If a ten-member board of directors is being selected, how many board members can stockholders elect under the majority voting rule if that group owns 60% of the voting shares? a. 10 b. 6 c. 7 d. 5 178
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15-11. Under cumulative voting rules: There are four board-of-director seats open; 200,000 voting shares of common stock outstanding; minority shareholders control 30% of the voting shares; how many of directors can the minority shareholders elect?
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This note was uploaded on 01/21/2011 for the course ACC 452 taught by Professor Mr.cula during the Spring '10 term at Abraham Baldwin Agricultural College.

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Chapter 15 MC - CHAPTER FIFTEEN Multiple Choice Questions...

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