ME BLEMS AND SOLUTIONS 10. The higher the bond rating, A. The higher the interest rate on the bond B. The lower the interest rate on the bond C. The higher the call premium D. The lower the call premium 11. Which of the following is. not a true statement? A. Common stockholders have a residual daim to income ers may force a corporation into bankruptcy for falilure to make interest payments C. Common stockholders are legally entitled to dividends D. A minority interest can still elect members to the Board of Directors under cumulative voting even though someone else owns 51% of the stock 12. The purpose of cumulative voting is A. To maintain majority control of the Board of Directors B. To allow minority stockholders the possibility of a voice on the Board of Directors C. To obstruct unfriendly mergers and takeover efforts D. To prevent the dilution of common stock through pre-emptive rigghts offerings 13. A rights offer made to existing shareholders with the sole purpose of making it more difficult for another firm to acquire the corporation is called A. A pre-emptive right B. A poison pill C. Ex-rights D. Rights-on