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?

  • 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?

    <p>Cumulative</p> Signup and view all the answers

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

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

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

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

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

    <p>Forcing the company to acquire shares at a set amount</p> Signup and view all the answers

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

    <p>Company can acquire shares at a set price</p> Signup and view all the answers

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

    <p>Proxy contests</p> Signup and view all the answers

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

    <p>Cumulative voting system</p> Signup and view all the answers

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