Types of Stock: Preferred vs. Common
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Questions and Answers

Which type of stock has preferences over common stock in terms of dividend distribution and corporate assets?

  • Class A shares
  • No par value shares
  • Preferred stock (correct)
  • Founders’ shares
  • What kind of dividends is paid directly to stockholders in the form of cash?

  • Stock dividends
  • Property dividends (correct)
  • Bond dividends
  • Scrip dividends
  • Which category of shares is generally offered to foreign shareholders?

  • Par value shares
  • Class B shares (correct)
  • Founders’ shares
  • Class A shares
  • What type of dividend is in the form of promissory notes indicating future benefits that stockholders will receive?

    <p>Stock dividends</p> Signup and view all the answers

    Which type of shares are usually given to incorporators?

    <p>Par value shares</p> Signup and view all the answers

    What does a bond represent in financial terms?

    <p>Loan from borrower to lender</p> Signup and view all the answers

    What kind of dividend is in the form of promissory notes indicating the kind of benefits the stockholders shall be entitled to receive in the future?

    <p>Scrip dividend</p> Signup and view all the answers

    Which kind of dividend is paid in cash to the stockholders?

    <p>Cash dividend</p> Signup and view all the answers

    What is the advantage of a corporation that has a separate judicial personality?

    <p>Legal capacity</p> Signup and view all the answers

    In corporate governance, which body is considered the highest governing body of a corporation?

    <p>Board of Directors (BOD)</p> Signup and view all the answers

    What type of financial instrument represents a loan made by the lender to a borrower?

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

    Which type of dividend is in the form of non-cash assets of the corporation?

    <p>Property dividend</p> Signup and view all the answers

    What type of corporation is limited to selected persons or members of the company?

    <p>Close corporation</p> Signup and view all the answers

    What voting method allows a stockholder to cast votes equal to the number of shares owned multiplied by the number of directors to be elected?

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

    Which type of stock represents the basic ownership in a corporation with all the basic rights of a share of stock?

    <p>Common stock</p> Signup and view all the answers

    In a non-stock corporation, how many votes can every member cast for each candidate?

    <p>One vote per candidate</p> Signup and view all the answers

    Which type of corporation is open to any person who may wish to become a part or stockholder?

    <p>Public corporation</p> Signup and view all the answers

    What is the term for the basic issue of shares in a corporation with all the basic rights of a share of stock?

    <p>Common stock</p> Signup and view all the answers

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