The declaration of a dividend on stock depends entirely on the discretion of the directors. True Falso Question 2 Which of the following best describes a prospectus? a. It is a document relating to purchase and subsequent resale of company assets and intellectual property, b. It is a document containing specified information about a stock offering and the corporation, c. It is a document containing information relating to the bylaws of the company d. It is a document pertaining to the conduct regulations of the company rt Which of the following is required by the Securities Investor Protection Act of 1970? a. Registered dealers must contribute to a fund to compensate customers of failed investment houses. b. Insiders must make certain disclosures. c. Anyone offering a new issue of securities for sale to the public must register it with the SEC. d. Corporations must make periodic disclosure statements regarding their financial structure. A stock option may be exercised at any point during the stated period of time in the contract. True Falso The fact a person is named on a stock certificate is prima facie evidence that person is the owner. True False A person may obtain shares of stock by subscription only after a corporation is organized. True False is preferred stock on which all dividends must be paid before the common stock receives any dividend. a Noncumulative preferred stock b. Par value preferred stock c. Participating preferred stock d. Cumulative preferred stock Preferred stockholders may receive a preference as to dividends, assets or both. True Falso Common stockholders do not possess the right to a share of the assets of a corporation on dissolution. True False A cash dividend may be paid out of paid-in surplus. True False Stock preferred as to assets gives the holder an advantage only in the event of liquidation. True False Cumulative preferred stock is preferred stock on which dividends have to be paid only for the current year before common stock dividends are paid. True False Which of the following is true of dividends paid to shareholders? a. Dividends can be paid with stock a corporation owns in another company. b. Stock dividends cannot be rescinded once declared. c. Dividends can be paid in the form of property manufactured by another organization d. Cash dividends can be declared and then rescinded by the directors, The federal Securities Act regulates the sale of securities in interstate commerce. True False Which of the following is true of restrictions on the sale of a private corporation's stock? a. Restrictions on the sale of stock are not binding on stockholders. b. They mean the holder has no right to any distribution that represents a share of the profits. c. Such restrictions are not common. d. They frequently require a stockholder to offer to sell the stock to the corporation or other shareholders. Which of the following is true about par-value stock? a. The par value of the stock must equal the value of money, property, or services received by the corporation. b. When sold by a corporation at a discount the corporation is liable to make up the discount o. The par value of the stock must equal the value of money, property, or services received by the stockholder who sellsit. d. Common stock usually has a par value, A publicly traded corporation is required to follow the regulations as set forth in the Securities Exchange Act of 1934, True False Once the directors of a corporation declare a cash dividend, it cannot later be rescinded. True False The of a corporation is the declared money value of its outstanding stock. a. preferred stock b. capital stock c. treasury stock d. inventory stock Which of the following best describes a share? a. It is total value of a company's liabilities. b. It is the total value of a company's assets. c. It the unit value of a company's liabilities. d. It is the unit value of a company's total stock