Restricted Shares May Have a Cocktail Provision

question 2

Multiple Choice

Restricted shares may have a cocktail provision. When might a coattail provision take effect?

• A)When a company increases its dividends
• B)When a buyer tries to acquire control of a company
• C)When a company reacquires some of its shares
• D)When a company issues preferred shares

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Definitions:

Population

The total number of people inhabiting a particular area or country.

Replacement Rate

In the context of benefits or salaries, it refers to the percentage of a worker's pre-retirement income that is paid out by a pension program upon retirement.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Future Value

The amount to which some current amount of money will grow if interest earned on the amount is left to compound over time.