1. Which of the following is not true about preferred stock? a. Preferred stock is a form of capital stock that receives one or more priorities over common stock b. Preferred stockholders surrender the right to vote in exchange for preference to dividends and assets upon liquidation of the company. C. A company reports its balances in both preferred stock and additional paid-in capital, in the stockholders' equity section of the balance sheet. d. All preferred stock is cumulative stock. 2. If a company's stock is cumulative: a. Preferred stockholders receive the current year annual dividend along with the previous year's dividends in arrears. b. Preferred stockholders receive only the current year annual dividend. c. Preferred stockholders receive cumulative dividends after the payment to common stockholders. d. Preferred stockholders do not receive dividends. 3. Assume that a company has 40,000 shares of preferred stock where the annual dividend rate is $0.50 per share, and $20,000 in total. Assume further that the company has not paid dividends for the previous two years. If the company's stock were non-cumulative, how much dividend would the stockholders receive in the current year? a. $60,000 b. $10,000 C. $20,000 d. None of these choices are correct. 4. What is treasury stock? a. The stock that the company reissues in the marketplace. b. The common stock that a company reacquires from stockholders. C. The stock that has been accumulated by the company over the years. d. A special stock that the company issues to its owners. 5. A company acquires 1,000 shares of its own stock when the stock is trading for $20 in April. In June, it reissues 100 shares at $30 per share. How much would go into the treasury stock account? a. $30,000 b. $18,000 C. $20,000 d. $3,000