Equity Securities UPDATED SCRIPT 2026
PRACTICE SOLUTIONS GRADED A+
● What is the difference between equity and debt? Answer: Equity
(stock) represents ownership, while debt (bonds) represents a creditor
relationship.
● What are the key characteristics of equity? Answer: Ownership
interest, limited liability, liquidity, potential income (dividends),
potential growth (capital appreciation), and residual claim on assets.
● What security represents ownership? Answer: Stock
● What rights do common stockholders have? Answer: Voting rights,
dividends, capital appreciation, preemptive rights, and residual claim in
liquidation.
● What are capital gains? Answer: Profits from the sale of an asset,
realized when sold and taxable.
● What is a stock dividend? Answer: More shares issued to
shareholders, not taxable when received, lowers cost basis per share.
PRACTICE SOLUTIONS GRADED A+
● What is the difference between equity and debt? Answer: Equity
(stock) represents ownership, while debt (bonds) represents a creditor
relationship.
● What are the key characteristics of equity? Answer: Ownership
interest, limited liability, liquidity, potential income (dividends),
potential growth (capital appreciation), and residual claim on assets.
● What security represents ownership? Answer: Stock
● What rights do common stockholders have? Answer: Voting rights,
dividends, capital appreciation, preemptive rights, and residual claim in
liquidation.
● What are capital gains? Answer: Profits from the sale of an asset,
realized when sold and taxable.
● What is a stock dividend? Answer: More shares issued to
shareholders, not taxable when received, lowers cost basis per share.
