if you purchase the stock of a publicly owned corporation: Multiple Choice You most likely bought your shares through an organized securities exchange rather than directly from the issuing corporation. The shares will be held by a mutual fund. You become a stockholder with an indirect ownership interest. You have closely held shares. 33
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- How many shares of stock should your new corporation authorize? How did you arrive at your number?If you own a company what you prefer to issue ordinary shares or bonds, explain why?Private placement is the: a. Sale of securities indirectly to a select group of investors. O b. Sale of newly issued shares of stock to the public. Oc. Offering of new securities to current shareholders on a pro-rata basis. O d. Sale of securities directly to large organizations.
- What is a stock split? As an investor, would youlike to see shares you own be split?A corporation may raise funds by offering shares of stocks to investors. Express your idea or understanding of this process.Contrast the differences between a stock dividend and a stock split. Imagine that you are a stockholder in a company. Determine whether you would prefer to see the company that you researched declare a 100% stock dividend or declare a two-for-one split. Provide support for your answer with one real-world example of your preference.
- Mutual Fund ABC owns shares in stocks X, Y and Z. Investor I is an investor in ABC. Who receives the dividends from X, Y & Z? ABC I XYZ all the aboveThere are two primary means to earn income as a stockholder. The first method is dividend income, and the second method is earnings from capital gains. With respect to the investor seeking dividend income, when an investor buys a stock from a corporation with a primary focus to earn dividend income, they will typically expect a higher dividend on common stock versus preferred stock. Discuss the dividend payment requirements of a common stock versus preferred stock, in terms of which type of stock has a primary claim on dividend distributions. Explain why the common stock investor demands a higher dividend rate.Does a company benefit when an owner of the company's stock sells these shares to another individual?
- The preemptive right allows common stockholders to: preempt the protective covenants of bondholders. vote for the board of directors. increase their wealth by selling their rights. convert common shares to preferred shares. maintain a proportionate share of ownership in the firm.If an investor were to sell 100 shares of Microsoft stock to another investor in the SECURITIES MARKET, this would be referred to as what type of transaction? - a future market transaction - a secondary market transaction -it is primary market transaction - a money marIn private placement O shares are offered through letter of offer O shares are offered through prospectus shares are offered through brokers shares are offered through investment bankers