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Shareholders' Voting Rights

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Questions and Answers

What is the primary purpose of a proxy in a shareholder meeting?

To receive multiple proxy solicitations for company proposals

To attend the meeting in person

To transfer the right to vote on the stockholder's behalf (correct)

To revoke the shareholder's power of attorney

What happens to a proxy if the stockholder attends the meeting?

It is automatically revoked (correct)

It is sent to the SEC for review

It is replaced by another proxy

It remains valid

Why must a company provide stockholders with information about items to be voted on?

To inform stockholders about quarterly reports

To comply with SEC regulations (correct)

To solicit proxy votes

To issue proxy statements

What is the term for a situation in which a group of shareholders tries to influence the outcome of a vote?

Proxy contest Signup and view all the answers

What is the responsibility of a Member BD firm in relation to proxy voting?

To ensure customers are alerted to all financial matters concerning issuers Signup and view all the answers

What is the primary benefit of voting by proxy for a stockholder?

To avoid attending the meeting in person Signup and view all the answers

What is the primary benefit of cumulative voting for a smaller investor?

Ability to allocate total votes in any manner they choose Signup and view all the answers

What is a potential risk associated with common stock investments?

Market risk and potential loss of purchasing power Signup and view all the answers

Which of the following is a type of voting that benefits larger shareholders?

Statutory voting Signup and view all the answers

What is the primary reason for investing in common stock?

Potential capital appreciation Signup and view all the answers

Which of the following is NOT a type of preferred stock feature?

Statutory Signup and view all the answers

What is a common scenario in which a company would issue bonds or convertible securities?

Mergers and acquisitions Signup and view all the answers

What is the procedure if a customer does not return the proxy by the 10th day before the annual shareholder meeting regarding minor importance matters?

The member may vote the shares as it sees fit. Signup and view all the answers

What reimbursement do member BD firms receive from issuers?

Reimbursement for all costs relating to the forwarding of proxy materials. Signup and view all the answers

In the case of a merger or issuance of additional shares, what is the requirement for member firms regarding customer proxies?

Members must obtain explicit customer instructions. Signup and view all the answers

What is the role of a member firm in relation to street name stock?

Nominal owner of record. Signup and view all the answers

What is the responsibility of a member firm regarding the voting of street name stock?

Vote the shares in accordance with the beneficial owner's wishes. Signup and view all the answers