7) IPOs that are generally made available to the average investor tend to be the

Question

7) IPOs that are generally made available to the average investor tend to be the less desirable new offerings.
true or false

8) Shareholders have the option of selling their rights granted via a rights offering.
true or false

15) With respect to dividend payments on stocks, the date of record is the date on which the payment is actually paid.
true or false

16) Investors should never pay more than par value for a stock.
true or false

18) Reinvested dividends

A. are taxed when the shares purchased with the reinvested dividend are sold.

B. are taxed at the time the dividend is paid.

C. do not increase the value of an investors holdings.

D. are generally sold at a premium over the market price.

19) Different classes of stock generally have either different voting rights or different dividends.
true or false

22) If a corporation opts for a rights offering, the current shareholders are obligated to purchase their proportional share of the offering.
true or false

29) If a corporation declares a 10% stock dividend, then

A. the share price of the stock will most likely decline by about 9%.

B. the share price of the stock will most likely increase by about 10%.

C. the share price of the stock will most likely remain unchanged.

D. each shareholder will get a 10% cash rebate off his or her next round lot purchase of the stock.

Explanation / Answer

7) IPOs that are generally made available to the average investor tend to be the less desirable new offerings.
false

8) Shareholders have the option of selling their rights granted via a rights offering.
true

15) With respect to dividend payments on stocks, the date of record is the date on which the payment is actually paid.
false

16) Investors should never pay more than par value for a stock.
false

18) Reinvested dividends

A. are taxed when the shares purchased with the reinvested dividend are sold.

19) Different classes of stock generally have either different voting rights or different dividends.
true

22) If a corporation opts for a rights offering, the current shareholders are obligated to purchase their proportional share of the offering.
false

29) If a corporation declares a 10% stock dividend, then

A. the share price of the stock will most likely decline by about 9%.

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