Question 6 of 400

Bubba owns stock with cumulative voting rights. There are five vacancies on a board and he owns 100 shares of stock. Bubba is entitled to cast the following votes:

Answer

Suggested Answer

The suggested answer is C.

500 votes. Under cumulative voting, the number of directors is multiplied by the number of shares owned. The votes may be cast all for a single director or divided in any manner among the directors.
Question 7 of 400

The definition of debentures is:

Answer

Suggested Answer

The suggested answer is D.

securities backed by the general credit of the issuers but no specific collateral. And in the case of some issuers, that may be fairly worthless.
Question 8 of 400

Convertible bonds have all of the following features except:

Answer

Suggested Answer

The suggested answer is C.

a normally higher yield than non-convertible bonds of the same issuer. Remember that the question says "except" for this feature. Convertible bonds normally do NOT have a higher yield than non-convertible bonds of the same issuer. Convertibles usually have a lower yield than non -convertible sisters.
Question 9 of 400

Although a corporation has no earnings in a particular year, it is obligated to pay interest on all its outstanding debt except the following:

Answer

Suggested Answer

The suggested answer is C.

adjustment bonds. These bonds are also known as income bonds. Interest is paid only if there is income.
Question 10 of 400

Interest rates rise from 5.10% to 5.30%. For a prospective buyer of five $1,000 bonds, what is the increase in interest payments as a result of the rise?

Answer

Suggested Answer

The suggested answer is D.

$10. Interest rates increased by 20 basis points. One basis point is 10 cents. So 20 basis points is $2. Butsince there are five bonds, that $2 x 5 =
$10.