B majority interest is ownership of more than 50 of

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b. Majority interest is ownership of more than 50% of the voting shares; controlling interest is ownership of shares to control operations. c. Controlling interest is ownership of more than 50% of the voting shares; majority interest is ownership of shares to control operations. d. None of the above are true. 183
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15-37. When an investment banker agrees to sell as many shares as possible but does not purchase the shares from the company, this is called: a. a best efforts agreement b. a syndicate agreement c. an IPO d. an underwriting 15.38. The current market price of a rights-on stock is $90.00. The subscription price is $81.00. The number of rights required to purchase one new share is 8. What is the approximate market price is one right? a. $0.88 b. $1.00 c. $1.13 d. $1.25 15.39. The current market price of an ex-rights stock is $89.00. The subscription price is $81.00. The number of rights required to purchase one new share is 8. What is the approximate market price is one right? a. $0.88 b. $1.00 c. $1.13 d. $1.25 15.40. Voting rights or dividend payment differences are indicative of a. target stock b. private stock c. class stock d. differential stock 15.41. Which of the following is false? a. Private corporations are exempt from SEC filings. b. Public corporations typically have many more shareholders that are not involved in running the corporation. c. Private corporations are generally smaller than public corporations. d. Public corporations have a board or directors; private corporations do not. 184
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15.42. Advantages of equity financing include: a. No requisite fixed payments b. Lower issuance cost than debt financing. c. Potential positive signaling effects. d. Potential dilution of earnings. 185
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CHAPTER FIFTEEN Multiple Choice Answers 15-1. B (Page 436) 15-2. C (Page 436) 15-3. B (Page 438) 15-4. A (Pages 438-439) 15-5. B (Page 439) 15-6. D (Page 440) 15-7. D (Page 440) 15-8. B (Pages 440-441) 15-9. A (Pages 441-443) 15-10. A (Pages 441-443) 15-11. A (Pages 441-443) 15-12. D (Pages 441-443) 15-13. A (Pages 441-443) 15-14. C (Pages 443-444) 15-15. A (Pages 443-444) 15-16. D (Pages 443-444) 15-17. B (Page 445) 15-18. C (Page 446) 15-19. D (Pages 446-447) 15-20. A (Pages 447-448) 15-21. B (Page 448) 15-22. A (Page 449) 15-23. A (Page 448) 15-24. B (Page 449) 15-25. A (Page 449) 15-26. C (Page 449) 15-27. A (Page 450) 15-28. A (Page 451) 15-29. A (Page 451) 15-30. C (Pages 451-452) 15-31. B (Page 451) 15-32. A (Page 452) 15-33. D (Pages 451-452) 15-34. C (Page 450) 15-35. A (Pages 441-443) 15-36. B (Page 440) 15-37. A (Pages 446-447) 15-38. B (Page 449) 15-39. B (Page 450) 15-40. C (Page 436) 15-41. D (Page 438) 15-42. A (Page 444) 186
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  • Spring '10
  • Mr.Cula
  • Accounting, a. b. c., b. c. d.

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