All of the Following Are True About the Issuance of Non-Voting

question 43

Multiple Choice

All of the following are true about the issuance of non-voting common stock EXCEPT

• A) it has been issued as a defense against an unfriendly takeover.
• B) it has been issued when the corporation wishes to raise capital through the sale of common stock, but does not want to relinquish its voting control.
• C) it tends to result in unequal voting rights among the shareholders.
• D) it tends to result in the dilution of voting rights of current stockholders.

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Definitions:

Enron

A former American energy company that went bankrupt in 2001 due to one of the largest accounting frauds in history.

WorldCom

Once a major telecommunications company that became infamous for its involvement in one of the largest accounting fraud scandals in history.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the securities industry.

Accounting Principles

Fundamental guidelines or rules that govern the field of accounting and prescribe how financial transactions should be recorded and reported.