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12 Cards in this Set

  • Front
  • Back
Common Stock
most prevalent type of equity security; have no special dividend rights and the lowest prority claim in the event of bankruptcy.
preferred stock
usually recieve preferential treatment over common stockholders when it comes to receiving dividends or cash payoffs in bankruptcy.
Convertible securities
usually are preferred stock or corporate bonds that are convertible into the firms common stock.
The most distinguishing feature of common stock?
is that it is the residual claim against the firms cash flows or assets. Common stockholders directly share in the firms profits.
Which is more risky common stock or preferred?
common stock
corporate payments to stockholders, not guaranteed
The tax reduction act of 1997
set a lower tax rate on capital gains than on dividends.
How can shareholders exercise control over the firms activities?
throught the election of a board of directors.
Vote by proxy
absentee vote
dual class firms
provides voting for one class of stock and excludes voting for another class of stock
Cummulative voting
voting for the board is made in one ballat, permittting shareholders the opportunity to aggregate their votes and cast them together.
straight voting
directors are elected one by one. maximun number of votes for each director equals the number of shares owned.