Indicate Whether Each of the Following Statements About Stockholders' Equity

question 4

Short Answer

Indicate whether each of the following statements about stockholders' equity is true or false.
_____ a)Preferred stockholders generally have no preference to assets when the company is liquidated.
_____ b)Preferred stockholders generally have a preference to dividends.
_____ c)Preferred stock carries voting rights that gives the preferred stockholders greater power in the corporation's decision making process than common stockholders have.
_____ d)Preferred stockholders generally receive a set or fixed amount of dividends.
_____ e)If a corporation has issued non-cumulative preferred stock,common stockholders may receive greater dividends than if the corporation has issued cumulative preferred stock.

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Definitions:

Required Reserve Ratio

The fraction of deposits that banks are obligated to hold in reserve, either in their vaults or at the central bank, and not loan out.

Excess Reserves

The funds that banks hold over and above the required reserve ratio set by the central bank.

Money Supply

The overall sum of financial resources present in an economy at a given moment.

Open Market Operations

are actions taken by central banks to buy or sell government securities in the open market to control the money supply and influence interest rates.