Question

With respect to voting rights, preferred stockholders typically Select one: a. have voting rights that are...

With respect to voting rights, preferred stockholders typically

Select one: a. have voting rights that are preferable ( i.e., better) than the voting rights of common stockholders.

b. have no voting rights, unless the firm fails to pay two consecutive quarterly dividends, at which point the preferred shareholders can elect a certain number of corporate directors.

c. have one vote per shareholder, regardless of the number of shares they own.

d. have the identical voting rights as common stockholders.

Owning mutual fund shares typically enables an investor to receive all the following EXCEPT

Select one:

a. reinvestment of dividends.

b. professional management.

c. diversification of investments.

d. control over the investment portfolio.

The use of leverage in purchasing real estate automatically

Select one:

a. requires the seller to use the simple income capitalization approach to valuation.

b. eliminates the need for a corporate market analysis.

c. increases investment risk.

d. decreases investment risk.

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Homework Answers

Answer #1

Hello

1) OPTION B IS CORRECT : have no voting rights, unless the firm fails to pay two consecutive quarterly dividends, at which point the preferred shareholders can elect a certain number of corporate directors.

Preference Shareholders do not have any voting right unless the firm fails to pay two consecutive quarterly dividends.

2) OPTION D IS CORRECT : control over the investment portfolio

Mutual funds provides the benefit of reinvestment of dividends, professional management and diversification.

3) OPTION C IS CORRECT : increases investment risk

Because, use of leverage imposes fixed interest rate burden and in case of sudden decrease in value of real estate, you will find yourself struck in debt trap.

I hope this clears your query.

Do give a thumbs up if you find this helpful.

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