FINRA SIE Exam Study Guide | 70 Questions with 100% Correct Answers

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If interest Rates fall the issuer will most likely call which bonds first? - ✔✔High Dividend Rate preferred issues trading at a premium What are some actions by a corporation will affect an indi... viduals common shareholder's equity - ✔✔Conversion of convertible preferred stocks or bond Repurchase of common shares Issuance of additional common shares (Stock splits do not effect shareholders equity but it must be voted on because it effects Par Value) Benefits to a Convertible stock compared to a regular debenture - ✔✔Convertible stock will have a slightly lower yield than non-convertible however it will raise in value as the market price of common stock rises What traits do preferred stock and bonds have in common? How are they different? - ✔✔Can be callable by issuer, both have periodic payments. Both are senior securities to common stock. Neither have voting rights Preferred is paid dividends on a percentage of face value much like the yield of a bond. Preferred stock has no maturity date and can be held perpetually while bonds have a set maturity date. Payments to preferred stock are not mandatory unless a declared dividend has been issued to common stock Payments to bond holders are mandatory When are common dividends declared and paid? - ✔✔Quarterly for both A customer owns 256 shares of ABC common stock. ABC declares a rights offering, with the terms being that for every 15 rights a shareholder may purchase one additional share.at $24 a share. Any fractional rights may be rounded up to buy an additional share. How many shares may the customer buy with these right? - ✔✔A share holder can buy a maximum of 18 shares with these rights paying $432 for them. The 17.06 shares may be rounded up to 18 [Show More]

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