TEST BANK and SOLUTION MANUAL for Fundamentals
of Corporate Finance, 5th Edition by Robert Parrino,
David Kidwell
A company has two open seats, Seat A and Seat B, on its board of directors. There
are 6 candidates vying for these 2 positions. There will be a single election to
determine the winner of both open seats. As the owner of 100 shares of stock, you
will receive one vote per share for each open seat. You decide to cast all 200 of your
votes for a single candidate. What is this type of voting called?
A. democratic
B. cumulative
C. straight
D. deferred
E. proxy - ANSWER: B
You want to be on the board of directors of Wisely Foods. Since you are the only
shareholder that will vote for you, you will need to own more than half of the
outstanding shares of stock if you are to be elected to the board. What is the type of
voting called that requires this level of stock ownership to be successfully elected
under these conditions?
A. democratic
B. cumulative
C. straight
D. deferred
E. proxy - ANSWER: C
You cannot attend the shareholder's meeting for Alpha United so you authorize
another shareholder to vote on your behalf. What is the granting of this authority
called?
A. altering
,B. cumulative voting
C. straight voting
D. indenture agreement
E. voting by proxy - ANSWER: E
What are the distributions to shareholders by a corporation called?
A. retained earnings
B. net income
C. dividends
D. capital payments
E. diluted profits - ANSWER: C
Callander Enterprises stock is listed on NASDAQ. The firm is planning to issue some
new equity shares for sale to the general public. This sale will occur in which one of
the following markets?
A. private
B. auction
C. exchange floor
D. secondary
E. primary - ANSWER: E
The secondary market is best defined by which one of the following?
A. market in which subordinated shares are issued and resold
B. market conducted solely by brokers
C. market dominated by dealers
D. market where outstanding shares of stock are resold
, E. market where warrants are offered and sold - ANSWER: D
An agent who maintains an inventory from which he or she buys and sells securities
is called a:
A. broker.
B. trader.
C. capitalist.
D. principal.
E. dealer. - ANSWER: E
An agent who arranges a transaction between a buyer and a seller of equity
securities is called a:
A. broker.
B. floor trader.
C. capitalist.
D. principal.
E. dealer. - ANSWER: A
The owner of one of the 1,366 trading licenses for the NYSE is called a:
A. broker.
B. member.
C. agent.
D. specialist.
E. dealer. - ANSWER: B
The person on the floor of the NYSE who executes buy and sell orders on behalf of
customers is called a(n):
of Corporate Finance, 5th Edition by Robert Parrino,
David Kidwell
A company has two open seats, Seat A and Seat B, on its board of directors. There
are 6 candidates vying for these 2 positions. There will be a single election to
determine the winner of both open seats. As the owner of 100 shares of stock, you
will receive one vote per share for each open seat. You decide to cast all 200 of your
votes for a single candidate. What is this type of voting called?
A. democratic
B. cumulative
C. straight
D. deferred
E. proxy - ANSWER: B
You want to be on the board of directors of Wisely Foods. Since you are the only
shareholder that will vote for you, you will need to own more than half of the
outstanding shares of stock if you are to be elected to the board. What is the type of
voting called that requires this level of stock ownership to be successfully elected
under these conditions?
A. democratic
B. cumulative
C. straight
D. deferred
E. proxy - ANSWER: C
You cannot attend the shareholder's meeting for Alpha United so you authorize
another shareholder to vote on your behalf. What is the granting of this authority
called?
A. altering
,B. cumulative voting
C. straight voting
D. indenture agreement
E. voting by proxy - ANSWER: E
What are the distributions to shareholders by a corporation called?
A. retained earnings
B. net income
C. dividends
D. capital payments
E. diluted profits - ANSWER: C
Callander Enterprises stock is listed on NASDAQ. The firm is planning to issue some
new equity shares for sale to the general public. This sale will occur in which one of
the following markets?
A. private
B. auction
C. exchange floor
D. secondary
E. primary - ANSWER: E
The secondary market is best defined by which one of the following?
A. market in which subordinated shares are issued and resold
B. market conducted solely by brokers
C. market dominated by dealers
D. market where outstanding shares of stock are resold
, E. market where warrants are offered and sold - ANSWER: D
An agent who maintains an inventory from which he or she buys and sells securities
is called a:
A. broker.
B. trader.
C. capitalist.
D. principal.
E. dealer. - ANSWER: E
An agent who arranges a transaction between a buyer and a seller of equity
securities is called a:
A. broker.
B. floor trader.
C. capitalist.
D. principal.
E. dealer. - ANSWER: A
The owner of one of the 1,366 trading licenses for the NYSE is called a:
A. broker.
B. member.
C. agent.
D. specialist.
E. dealer. - ANSWER: B
The person on the floor of the NYSE who executes buy and sell orders on behalf of
customers is called a(n):
