Reading 36: Overview of Equity Securities

Which of the following best describes the claim of common shareholders on a company's assets?

Under statutory voting, a shareholder with 100 shares participating in an election for three board directors can cast a maximum of how many votes for a single candidate?

Which voting system is most likely to allow a minority shareholder to secure representation on the board of directors?

Preferred stock is considered a hybrid security because it shares characteristics with both:

Which type of preferred share requires the issuer to pay any omitted dividends from previous periods before paying dividends to common shareholders?

Participating preference shares distinguish themselves from non-participating shares by offering shareholders the potential to:

Which of the following is a key advantage of convertible preference shares for an investor?

Which characteristic is most likely associated with private equity compared to public equity?

Capital provided to firms early in their life cycles to fund development and growth is best described as:

In a leveraged buyout (LBO), the acquirer typically:

A PIPE transaction allows a public firm to:

When investing directly in foreign securities, an investor is most likely to face which of the following obstacles?

A security that trades in a local market but represents ownership in a foreign firm is known as a:

Which type of depository receipt generally provides the investor with voting rights?

Global Depository Receipts (GDRs) are most commonly issued:

American Depository Receipts (ADRs) are denominated in:

Which level of American Depository Receipt allows a firm to raise capital in the United States?

A key characteristic of Rule 144A ADRs is that they:

Global Registered Shares (GRS) differ from Depository Receipts in that GRS:

A Basket of Listed Depository Receipts (BLDR) is best described as:

The total return on an equity investment in a foreign currency includes dividends, price changes, and:

Comparing preferred stock to common stock, preferred stock generally has:

Which feature would likely result in the highest dividend yield for a preferred share, all else equal?

Cumulative preferred shares are considered less risky than non-cumulative preferred shares because:

From a firm's perspective, issuing equity securities is useful for:

The book value of equity is calculated as:

The market value of equity reflects:

A company has net income of 50 million and average book value of equity of 250 million. Its Return on Equity (ROE) is:

A price-to-book ratio greater than 1.0 typically indicates that:

A firm's cost of equity is best interpreted as:

If a shareholder holds 100 shares and there are 4 director seats open, how many votes can they cast for a single candidate under statutory voting?

If a shareholder holds 200 shares and there are 3 director seats open, how many votes can they cast for a single candidate under cumulative voting?

In the event of liquidation, holders of non-participating preference shares typically have a claim equal to:

Mezzanine financing is a stage associated with which type of private equity investment?

A management buyout (MBO) is a specific type of:

How is the share price of private equity typically determined?

Global financial markets are considered integrated when:

Studies suggest that reducing capital barriers in a country typically leads to:

The underlying security on which an American Depository Receipt (ADR) is based is called the:

A Japanese investor holding Euro-denominated shares will realize greater Yen-based returns if:

Historically, long-term real returns on equity investments have been:

The risk of equity securities is most commonly measured by:

Compared to non-putable preferred shares, putable preferred shares usually exhibit:

Compared to non-callable preferred shares, callable preferred shares usually exhibit:

Publicly traded equity securities provide a firm with 'currency' that can be used to:

An increase in a firm's retained earnings will directly increase its:

The difference between the market value of equity and the book value of equity usually reflects:

A firm has beginning equity of 200, ending equity of 220, and net income of 42. Using the average equity method, the ROE is:

When a firm issues debt to repurchase equity, the immediate effect is typically to:

If an investor estimates that a stock's expected return exceeds their minimum required rate of return, the stock is considered: