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14. Pre-emptive rights means that Existing shareholders can prevent management from issuing additional common stock Common shareholders can pre-empt preferred shareholders for dividends Existing shareholders
14. Pre-emptive rights means that Existing shareholders can prevent management from issuing additional common stock Common shareholders can "pre-empt" preferred shareholders for dividends Existing shareholders are guaranteed an opportunity to retain their proportional share of ownership Management can preempt the right of shareholders to receive dividends If earnings are down A. B. C. D. 15. Preferred stock may be good for a company because it Expands the capital base of the firm without diluting the common stock ownership Does not require interest payments in times of financial troubles, but are tax- deductible when dividends are paid Is not as costly as common stock or bonds Has no future negative ramifications when dividend payments are missed A. B. C. D. 16. The marginal principle of retained earnings means that each potential project to be financed by retained earnings must A. Provide a higher rate of return than the stockholders can on their after-tax dividend income B. Yield a rate of return equal to or greater than the marginal cost of capital C. Provide enough return to pay the corporation's marginal tax rate D. Provide enough return to pay future dividends 17. Which of the following does not affect a company's dividend policy? A. Legal rules concerning capital impairment B. The efficient market hypothesis Access to capital markets The tax position of shareholders D
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