1. Which of the following statements is FALSE?

a. from an individual investor's perspective, preferred stock is riskier than bonds.

b. owners of preferred stock have greater voting rights than common shareholders.

c. Companies are more likely to issue preferred stock if they have a low tax bracket since preferred stock dividends are not tax deductible.

d. If a preferred issue is cumulatice this means that any unpaid dividends are held in arrears.

2. Which statement is TRUE?

a. Dividend rights say that shareholders get any remaining assets after all creditors have been paid in bankruptcy

b. Accotding to financial theory, stock price should be unaffected by a two-for-one stock split.

c.A stock split is a large stock dividend so that you might have twice as many shares with each share being worth half as much.

d. The stock price should fall by the amount of the dividend on the payment date.