#1
Which of the following terms refers to the total number of shares that a company has issued?
Authorized shares
ExplanationTotal number of shares a company can issue.
#2
What is the term for the portion of a company's profit allocated to each outstanding share of common stock?
Earnings per share
ExplanationProfit per outstanding share.
#3
Which of the following statements is true regarding preferred stock?
Preferred dividends are paid before common dividends
ExplanationDividends priority over common stock.
#4
What does it mean when a company buys back its own shares?
It decreases the number of outstanding shares
ExplanationReduction in outstanding shares.
#5
What is the significance of the par value of a stock?
It is a nominal value assigned to the stock
ExplanationNominal value of the stock.
#6
Which of the following is NOT a common stock characteristic?
Dividend priority
ExplanationNot a common stock feature.
#7
What is the role of the board of directors in a company's stock structure?
To oversee company operations and represent shareholders' interests
ExplanationSupervision of company and shareholder representation.
#8
Which of the following statements about common stockholders' rights is true?
They have voting rights in corporate decisions
ExplanationEntitled to vote in corporate decisions.
#9
What is a stock split?
When a company divides its existing shares into multiple shares
ExplanationExisting shares divided into multiples.
#10
What does a high price-to-earnings (P/E) ratio typically indicate about a stock?
It is overvalued
ExplanationStock's potential overvaluation.
#11
Which of the following statements best describes a stock's beta coefficient?
It measures a stock's volatility relative to the market
ExplanationVolatility relative to market.
#12
What is a poison pill defense strategy used by companies?
Issuing additional shares to dilute the hostile bidder's ownership
ExplanationDilution of hostile bidder's ownership.
#13
What is the main purpose of issuing treasury stock?
To decrease the number of outstanding shares
ExplanationReduction in outstanding shares.
#14
What does it indicate when a company's stock has a low liquidity ratio?
There is low demand for the stock in the market
ExplanationLow market demand for the stock.