SEC 2.3

1.American Liquidators Corporation (Ticker LQDT) has 100 million outstanding common shares. The company would like to raise capital by selling 100 million new shares. In order to accomplish this, they would A. offer warrants to existing shareholders B. suggest that existing shareholders go to the market and double their existing position C. offer stock rights to existing shareholders D. perform a stock split

2. Squidco, Inc., is issuing 100 million dollars in 4 ½% bonds maturing in 20 years. When purchased at issue, the buyers will receive an additional security that allows them to purchase 20 shares of Squidco common stock at $50 per share anytime in the next 10 years. Squidco common is currently trading at $29.95 a share. This is an example of A. a warrant B. a stock right C. a follow-on offering D. a call

3. Which of the following is a taxable event for an investor when it occurs? A. Stock dividend distribution B. Cash dividend distribution C. Forward split D. Reverse split

4. In a stock buyback, the shares are purchased by which of the following? A. Owner B. Board of directors C. Issuer of the shares D. Investment trust

5. A customer has returned a signed proxy statement for stock held in street name by a member firm. He did not indicate how he wanted to vote for any issues listed on his ballot. What action, if any, is required of the member firm? A. No action is required and no votes are cast. B. The firm must contact the beneficial owner of the stock and ask for direction on how to vote on the proposals listed. C. The firm may vote on the ballot as it sees fit for the benefit of the customer. D. The firm must vote in accordance with the recommendations made by the issuer of the stock.