6. Which of the following statements is correct? A. Common shares have priority over preferred shares. B. All issued shares are eligible to vote for the board of directors. C. The number of shared issued is greater than the number of shares outstanding is greater than the number of shares authorized. D. A share with cumulative dividends must be a preferred share. 7. 1,000 preferred shares have a par value of $50 per share, a dividend rate of 10% and are redeemable for $80 per share. The 1,000 preferred shares are sold for $75 per share. How much dividends may the preferred shareholders expect to receive? A. $3,000 B. $5,000 C. $7,500 D. $8,000 8. Which statement best describes the "zero common equity method"? A. Under this method of accounting, for a convertible bond, all of the bond value would be counted as a liability. B. Under this method of accounting, for a convertible bond, the issuing entity would record a liability for the estimated value of the bond without the conversion feature. C. Under this method of accounting, for a convertible bond, an estimate would be made of the fair value of all components and allocated proportionally to all components. D. Under this method of accounting, the common share component is considered the least reliably measured amount. 9. Which statement is correct about the accounting for employee stock options? A. The expense is recorded over the period of vesting. B. The expense is recorded over the period to expiry. C. The expense is recorded immediately upon grant date.. D. No expense is recorded for accounting purposes. 10. What is a "put" option? A. A contract that gives the holder the right to sell an instrument at a pre-specified price. B. A contract that is derived from some other underlying quantity, index, asset or event. C. A contract that gives the holder the right to acquire an instrument at a pre-specified price. D. A contract that gives the holder the right to buy or sell something at a specified price.