Corporate Ownership and Voting Procedures

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What is one mechanism that has evolved to mitigate the conflict between shareholders and managers in major Canadian corporations?

Shareholders holding majority of voting power

Management having control over board of directors

Managers setting their own remuneration

Shareholders electing a board of directors (correct)

In major Canadian corporations, what happens in poorly performing companies in terms of management?

Management is rewarded with bonuses

Management is given more decision-making power

Management is replaced by a new team (correct)

Management is allowed to continue with no changes

What does preferred stock in major Canadian corporations have priority over, in terms of dividends?

Board of directors' compensation

Management remuneration

Common stock (correct)

Retained earnings

Which type of preferred dividends are paid before any distribution to common shareholders is made?

Cumulative Signup and view all the answers

What does it mean when preferred stock is non-cumulative?

Dividends are not paid unless declared by the board of directors Signup and view all the answers

What happens in the cumulative type of preferred stock when dividends are in arrears?

Company may not pay dividends on common shares or redeem preferred shares Signup and view all the answers

In a retractable type of preferred stock, what right does the investor have?

Forcing the company to acquire shares at a set amount Signup and view all the answers

What is a key feature of redeemable preferred stock in terms of share acquisition?

Company can acquire shares at a set price Signup and view all the answers

Which mechanism allows shareholders to replace management in poorly performing companies?

Proxy contests Signup and view all the answers

What voting right ensures shareholders have voting power proportionate to their shareholdings?

Cumulative voting system Signup and view all the answers

Corporate Ownership and Voting Procedures

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Questions and Answers

What is one mechanism that has evolved to mitigate the conflict between shareholders and managers in major Canadian corporations?

In major Canadian corporations, what happens in poorly performing companies in terms of management?

What does preferred stock in major Canadian corporations have priority over, in terms of dividends?

Which type of preferred dividends are paid before any distribution to common shareholders is made?

What does it mean when preferred stock is non-cumulative?

What happens in the cumulative type of preferred stock when dividends are in arrears?

In a retractable type of preferred stock, what right does the investor have?

What is a key feature of redeemable preferred stock in terms of share acquisition?

Which mechanism allows shareholders to replace management in poorly performing companies?

What voting right ensures shareholders have voting power proportionate to their shareholdings?

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