Question 11 (1 point)

An operating lease

Question 11 options:

	has a lease term equal to 75% or more of the estimated property.
	is usually short-term and is often cancelable at the option of the lessee.
	must appear on the balance sheet.
	None of these options

Question 12 (1 point)

The "call" provision on some bonds allows

Question 12 options:

	the bondholder to redeem the bond earlier than maturity, but usually involves a call premium.
	the corporation to request additional capital contributions from the bondholder.
	the corporation to redeem the bonds earlier than maturity but usually for a premium over the par value.
	the bondholder to convert the bond into preferred stock.

Question 13 (1 point)

Which of the following represents an inflow in a bond refunding decision?

Question 13 options:

	The call premium
	The write-off of underwriting cost
	The cost savings from lower interest rates
	Two of the options

Question 14 (1 point)

Which one of these conditions qualifies a lease as a "capital lease?"

Question 14 options:

	The lease contains a bargain purchase price at the end of the lease.
	The lease must have a value of at least $10 million.
	The lease must have a life of 10 years.
	All of these options

Question 15 (1 point)

A serial bond repayment plan involves a(n)

Question 15 options:

	lump-sum payment at maturity.
	conversion of debt to common stock.
	early redemption of all debt.
	series of installments to retire the debt over the life of the issue.

Question 16 (1 point)

Common stockholders' rights include all of the following except for which one?

Question 16 options:

	Fixed dividend yield
	Voting rights
	First option to purchase new shares
	Residual claim to income

Question 17 (1 point)

Sharpe Products has one million outstanding shares and seven directors to be elected. Cumulonimbus Holdings owns 200,000 shares of Sharpe. How many directors can Cumulonimbus elect with cumulative voting?

Question 17 options:

	0
	1
	2
	3

Question 18 (1 point)

North stock sells for $65 rights-on, and the subscription price is $55. Nine rights are required to purchase one share. The value of a right is ________.

Question 18 options:

	$0.11
	$1.11
	$1.00
	$1.50

Question 19 (1 point)

Which of the following statements is true with respect to cumulative voting?

Question 19 options:

	Cumulative voting permits multiple votes for a single director.
	Cumulative voting gives minority shareholders a better chance of being represented on the board of directors.
	If six directors are to be elected and you own 100 shares, you may vote all 600 votes for one director and none for the others.
	All of these options are true.

Question 20 (1 point)

A stock is said to sell "ex-rights"

Question 20 options:

	when the period in which the subscription privilege is to be exercised has expired.
	when transfer of stock ownership no longer carries with it the privilege of subscription.
	after the rights have all been exercised and the new issue is completely sold.
	after the terms of the subscription have been made public.