金融市场与机构Madura第九版题库ch10.docVIP

Chapter 10 Stock Offerings and Investor Monitoring 1. Which of the following statements is incorrect? A) A stock is a certificate representing partial ownership in a corporation. B) Like debt securities, common stock is issued by firms to obtain funds. C) Stocks are issued by corporations to raise short-term funds. D) The secondary stock market enables investors to sell stocks that they had previously purchased. ANSWER: C 2. Preferred shareholders A) typically have the same voting rights as common shareholders. B) do not share the ownership of the firm with common shareholders. C) typically participate in the profits of the firm beyond the stated fixed annual dividend. D) may not receive a dividend every year. ANSWER: D 3. From a cost perspective, preferred stock is a less desirable source of capital for a firm than bonds. A) True B) False ANSWER: A 4. A ______ requires that dividends cannot be paid on common stock until all current and previously omitted dividends are paid on preferred stock. A) residual claim B) preferred margin C) cumulative provision D) liquidation claim ANSWER: C 5. Firms assume ______ risk when they issue preferred stock than when they issue bonds.? The payment of dividends on preferred stock ______ be omitted without the firm being forced into bankruptcy. A) more; can B) less; can C) more; cannot D) less; cannot ANSWER: B 6. When a corporation first decides to issue stock to the public, it engages in a(n) A) secondary offering. B) initial public offering. C) seasoned equity offering. D) none of the above ANSWER: B 7. A firm can best avoid the time lag between registering new securities with the SEC and actually selling them by A) use of proxy. B) shelfregistration. C) use of a margin call. D) use of preemptive rights. ANSWER: B 8. The process by which the lead underwriter solicits indications of interest by institutional investors in an IPO at various possible _______ prices is referre