#1
Which of the following is a common type of corporate equity?
Preferred Stock
ExplanationA common type of corporate ownership representing ownership with fixed dividends.
#2
What does 'IPO' stand for in the context of corporate ownership?
Initial Public Offering
ExplanationThe initial sale of company shares to the public for the first time.
#3
What is a 'shareholder'?
An owner of a portion of the company
ExplanationAn individual or entity holding ownership interest in a corporation.
#4
What is a 'proxy' in the context of corporate ownership?
A person appointed to represent and vote on behalf of a shareholder
ExplanationAn appointed entity empowered to vote on behalf of a shareholder.
#5
What is the role of a board of directors in a corporation?
To represent shareholders' interests and oversee management
ExplanationThe board oversees the company's management and represents shareholders' interests.
#6
What is a 'stock certificate'?
A legal document proving ownership of shares in a corporation
ExplanationA formal document verifying ownership of shares in a company.
#7
What is the primary purpose of issuing stock options to employees?
To incentivize employees and align their interests with shareholders
ExplanationTo motivate employees and align their interests with company performance.
#8
What is 'market capitalization'?
The total value of all outstanding shares of a company
ExplanationThe total market value of a company's outstanding shares.
#9
What is the difference between common stock and preferred stock?
Common stockholders have voting rights, while preferred stockholders do not.
ExplanationPreferred stockholders generally lack voting rights compared to common stockholders.
#10
What does the 'float' refer to in stock market terminology?
The portion of shares available for trading by the public
ExplanationThe amount of shares available for public trading.
#11
What is a 'treasury stock'?
Stock held by the company itself
ExplanationShares of a company's stock repurchased and held by the company.
#12
What is a 'poison pill' defense in corporate governance?
A measure to protect against hostile takeovers
ExplanationA defensive strategy adopted to thwart hostile takeover attempts.
#13
What is a 'spin-off' in corporate finance?
A type of corporate restructuring involving the creation of a new independent company
ExplanationThe creation of an independent entity through the division of an existing business.
#14
What is 'treasury stock method' used for?
To calculate stock option dilution impact on EPS
ExplanationA method used to compute the impact of stock options on earnings per share (EPS).