Equity Securities Quiz

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Multiple-choice practice with instant feedback — pick an answer, see the rationale, and every miss is scheduled back into your flashcard reviews. Progress saves in this browser.

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Terms in this set

Common Stock Equity ownership in a corporation carrying the right to vote, receive dividends if declared, inspect books, maintain proportionate ownership (preemptive rights), and claim residual assets last in a liquidation.
Preferred Stock Equity with a fixed stated dividend, priority over common stock for dividends and liquidation, and normally no voting rights; its market price behaves like a bond, falling when interest rates rise.
Rights & Warrants Both let the holder buy the issuer's stock at a set price: preemptive rights are short-term (weeks), issued to existing shareholders, and priced below the market; warrants are long-term (often years), usually attached to other securities as a sweetener, and priced above the market at issuance.
American Depositary Receipts (ADRs) Negotiable certificates, issued by U.S. banks and traded in U.S. markets in dollars, that represent shares of a foreign company held on deposit overseas — the standard way U.S. investors buy foreign equities.
Dividends & Key Dates Distributions of corporate earnings — cash or additional stock — declared by the board; the sequence of dates runs declaration, ex-dividend, record, and payable.
Stock Splits A change in the number of outstanding shares with a matching price adjustment so total market value is unchanged: forward splits (e.g., 2-for-1) lower the price; reverse splits raise it.
Treasury Stock Shares a corporation has issued and then repurchased; treasury stock carries no voting rights, pays no dividends, and reduces the count of outstanding shares.
Restricted & Control Stock Restricted stock is unregistered stock acquired privately (e.g., in a private placement) that generally must be held six months before resale; control stock is registered stock held by affiliates (officers, directors, >10% owners), whose sales face volume limits under Rule 144.