It is frequently stated that the one purpose of the preemptive right is to allow individuals to maintain their proportionate share of the ownership and control of a corporation. a. How important do you suppose control is for the average stockholder of a firm whose shares are traded on the New York Stock Exchange? b. Is the control issue likely to be of more importance to stockholders of publicly owned or closely held (private) firms?

It is frequently stated that the one purpose of the preemptive right is to allow individuals to maintain their proportionate share of the ownership and control of a corporation. a. How important do you suppose control is for the average stockholder of a firm whose shares are traded on the New York Stock Exchange? b. Is the control issue likely to be of more importance to stockholders of publicly owned or closely held (private) firms?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 11DQ

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Which of the following represents one of the basic rights of stockholders? a. Stockholders may sell their stock back to the company if they wish. b. Stockholders may authorize a business contract on behalf of the corporation. c. Stockholders may determine at what price the company issues stock. d. Stockholders may participate in management by voting on corporate matters.
Which of the following statements is NOT CORRECT? When a corporation’s shares are owned by a few individuals who own most of the stock or are part of the firm’s management, we say that the firm is “closely, or privately, held.” “Going public” establishes a firm’s true intrinsic value and ensures that a liquid market will always exist for the firm’s shares. Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. When stock in a closely held corporation is offered to the public for the first time, the transaction is called “going public,” and the market for such stock is called the new issue market.
Under IFRS 10, parent corporation is the entity that controls one or more entities. How does IFRS 10 define control? Choose the best answer A. An investor controls an investee when it owns more than 50% of all the outstanding capital stocks, whether common or preferred. B. An investor controls an investee when it has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. C. An investor controls an investee when it has the ability to influence the financial and operating policies of an entity so as to obtain benefits from its activities. D. An investor controls an investee when it is exposed, or has the right to variable return from the investment with the investee and has the ability to affect those returns through the power over the investee.
Which of the following is not a characteristic of the commonstock of a large, publicly owned corporation?a. The shares may be transferred from one investor toanother without disrupting the continuity of businessoperations.b. Voting rights in the election of the board of directors.c. A cumulative right to receive dividends. d. After issuance, the market value of the stock is unre-lated to its par value.
Which of the following statements is CORRECT? A The stock of publicly owned companies does not need to be registered with and reported to a regulatory agency such as the SEC. B When a corporation's shares are owned by a few individuals, we say that the firm is publicly traded. C "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. D When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. E If a firm goes public, it will always raise additional new capital for the firm itself.
Should the qualifications of the board of directors play a role in your decision whether to buy the stock of a particular corporation? Why or why not?
Which of the following statements is NOT CORRECT? a. It is possible for a firm to go public and yet not raise any additional new capital for the firm itself. b. When a corporation's shares are owned by a few individuals, we say that the firm is "closely, or privately, held." c. The stock of publicly owned companies must generally be registered with and reported to a regulatory agency such as the SEC. d. When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. e. "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares.
Under the corporate form of business organization, Group of answer choices a)ownership rights are easily transferred b)a stockholder is personally liable for the debts of the corporation c)stockholders’ acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation d)stockholders wishing to sell their corporate shares must get the approval of other stockholders
What is the control requirement of § 351? Describe the effect of the following in satisfying this requirement: A shareholder renders only services to the corporation for stock. A shareholder renders services and transfers property to the corporation for stock. A shareholder has only momentary control after the transfer. A long period of time elapses between the transfers of property by different shareholders.
Which of the following statements is NOT CORRECT? (A) Going public establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares (B) Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. (C) When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public." and the market for such stock is called the new issue market (D) It is possible for a firm to go public and yet not raise any additional new capital (E) When a coporation';s shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closaly, or privately, held.
True or false Corporations are legal entities separate from their owners and offer the advantage of limited liability to the shareholders__________________________. Common stock carries voting privileges while preferred stock gives up this right to receive a dividend preference________________________. The board of directors who are responsible for dividends creates the liability for dividends on the declaration date ___________________________.
Which of the following statements is NOT correct about the rights granted to common stockholders? Group of answer choices a. Stockholders may transfer their right to vote to a second party by means of a proxy. b. Dividends due to common stockholders are cumulative. c. Common stockholders have the right to elect a firm's directors. d. In large, publicly traded firms, managers typically have some stock but their personal holdings are generally insufficient to win voting control.