QUESTION: 65

Whish of the following factor/s is/are most important for the redemption provisions that affect their value?

Call price
Whether or not a sinking fund or some other means of financing the redemption is established
Issuing company’s financial ability to cash out the preferred shares without some sort of redemption fund.
Redemption methods

Answer(s): D

QUESTION: 66

The primary impact on the value of a sinking fund preferred stock results from the fact that redemption creates a finite stream of income to the investor plus___________ .

A terminal value versus a theoretically infinite stream of income available to the onsinking fund preferred stockholder.
A negative value versus a theoretically infinite stream of income available to the onsinking fund preferred stockholder.
A terminal value versus a theoretically finite stream of income available to the nonsinking fund preferred stockholder.
A positive value versus a theoretically finite earning available to the non-sinking fund preferred stockholder.

Answer(s): A

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The most prevalent measure for assessing the likelihood of receiving future preferred dividends is the company’s___________ , commonly defined as the sum of pretax income plus interest expense divided by the sum of interest expense plus preferred dividends adjusted for tax.

Variable-charge coverage ratio
Fixed-charge coverage ratio
fixed-charge leverage ratio
fixed-charge liquidity ratio

Answer(s): B

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QUESTION: 68

1. Dissenting stockholder actions. 2. Minority oppression actions. Either may be accompanied by claims of breach of fiduciary duty. These are the actions brought by:

Minority shareholder
Majority shareholders
OTC Trading
Short Selling

Answer(s): A

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QUESTION: 65

QUESTION: 66

QUESTION: 67

QUESTION: 68