The Issuance of Shares of Preferred Stock to Shareholders

question 32

Multiple Choice

The issuance of shares of preferred stock to shareholders

• A) increases preferred stock outstanding.
• B) has no effect on preferred stock outstanding.
• C) increases preferred stock authorized.
• D) decreases preferred stock authorized.

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Definitions:

Creditor

An entity to which a debtor owes money.

Incorporator

A person or entity that signs the articles of incorporation, thereby initiating the creation of a corporation.

De Jure Status

A legal term that means something is recognized by law, regardless of the actual situation on the ground.

Cumulative Voting

A voting system used in corporate elections that allows shareholders to allocate all their votes to one candidate or distribute them among several candidates.