Series 7 practice questioneasyEquity Securities — Common Stock
Which of the following rights is most commonly associated with common stockholders?
- AThe right to vote on corporate matters such as board elections✓ Correct answer
- BThe right to receive a fixed dividend each quarter
- CThe right to redeem shares at any time for the initial purchase price
- DThe right to convert shares into bonds at par value
Explanation
Why A — The right to vote on corporate matters such as board elections
Common stockholders have the right to vote on major corporate matters, including the election of the board of directors. Unlike preferred stockholders, common stockholders do not have a guaranteed fixed dividend, and shares are not redeemable at a fixed price.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 758+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Investment Information & Recommendations questions
- A corporation's board of directors declares a cash dividend of $0.50 per share. On which date does the stock begin…
- An investor owns 200 shares of XYZ Corp at $60 per share. After a 3-for-1 stock split, what will the investor hold?
- A company trading at $2 per share announces a 1-for-10 reverse stock split. An investor who owns 1,000 shares will now…
- Preemptive rights allow existing shareholders to:
- Under cumulative voting, a shareholder who owns 300 shares and is voting on 4 board seats may cast how many total votes?
- A company has $4 cumulative preferred stock outstanding and has not paid dividends for 2 years. Before common…
- Which type of preferred stock allows the holder to receive dividends in excess of the stated rate if the company's…
- An investor holds 100 shares of $50 par convertible preferred stock, convertible at $25 per common share. How many…