Common stock is equity Blank______. Multiple choice question. without priority for dividends or in bankruptcy with priority for dividends and in bankruptcy with priority for dividends but not in bankruptcy with priority in bankruptcy but not for dividends

Common stockholders: a) have a residual claim on both income and assets. b) have a higher claim on assets than preferred stockholders c) are last in line in the event of bankruptcy d) Both A & B e) Both A & C f) Both B &C g) All of the above

The cash flows associated with common stock are more difficult to estimate than those related to bonds because stock has a residual claim against the company versus a contractual obligation for a bond.   Group of answer choices   True False

Which of the following statements concerning common stock and the investment banking process is NOT CORRECT?   a. The preemptive right gives each existing common stockholder the right to purchase his or her proportionate share of a new stock issue.     b. The announcement of a large issue of new stock could cause the stock price to fall. This loss is called "market pressure," and it is treated as a flotation cost because it is a cost to stockholders that is associated with the new issue.     c. If a firm sells 1,000,000 new shares of Class B stock, the transaction occurs in the primary market.     d. Listing a large firm's stock is often considered to be beneficial to stockholders because the increases in liquidity and reputation probably outweigh the additional costs to the firm.     e. Stockholders have the right to elect the firm's directors, who in turn select the officers who manage the business. If stockholders are dissatisfied with…

Regarding the use of bonds or preferred stock for raising equity, which of the following statements is true regarding the potential of triggering bankruptcy? Oa. Non-payment of bond interest can trigger a company into bankruptcy. Ob. Non-payment of preferred dividends can trigger a company into bankruptcy. c. Bankruptcy cannot be triggered until there is non-payment of both bond interest and preferred dividends. d. Bankruptcy cannot be triggered by either non-payment of bond interest or preferred dividends.

True or False Please answer both. 1. Holders of equity have claims on both income and assets that are secondary to the claims of creditors 2. Preferred stock is a special stock having a fixed periodic dividend that must be paid prior to payment of interest to outstanding bonds

For the transaction of the purchase of common stock, why are we debiting cash and crediting the common stock? Would you not reverse this transaction, if so the retained earnings are also incorrect.

PART A: Common stock has seniority relative to preferred stock. True False PART B: Issuance or flotation costs are the costs investors pay to brokers when they purchase common stock. True False

Answer the multiple-choice question below: 1. The valuation of common stock is more complicated than the valuation of either bonds or preferred stock because I.Dividends of common stock are expected to grow at an uneven rate II.Cash flows of common stock are generally more uncertain III. The dividends of common stock are usually not declared IV.Cash flows of bonds or preferred stock are usually uncertain Select one: a. II only b. I only c. II and III only d. I and II only

Which of the below statements is false for equity?  A. Limited liability B.Residual claim on firm value C.Payouts to equity holders must be made before interest payments D.Voting Rights