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Series 7 Kaplan Financial EducationKaplan Financial Education
Benchmark SurveyIt is important to Kaplan that we provide you with the best licensing exam preparation possible. Your feedback is important to us. We will be asking you to evaluate both your class and your instructor. The evaluation process is done online to protect your privacy and to give you the freedom to be open in your response. espo se1. During the last day of class, you will receive the initial survey through your
email.2. If you do not respond to the first survey, you will receive a reminder email 3
business days after class. 3. A second survey will allow you to provide additional feedback regarding your
success on the exam.Thank you for taking part in this important process.
Common Stock (Rights of Common (Outstanding) Shareholders (continued))Cost basis adjustment for stock dividends:Shareholder long 100 shares at $50Company declares 10% stock dividendHint: aggregate position value must be the same before and after adjustmentadjustment
Common Stock (Rights of Common (Outstanding) Shareholders (continued))Cost basis adjustment for even stock splits (2:1, 5:1)Shareholder long 100 shares at $40Stock splits 2:1Hint: aggregate position value must be the same before and after adjustment
Before split: 100 shares × $40 = $4,000Calculate new cost basis: $4,000 / 200 shares = $20(100 shares × split ratio 2/1)
Common Stock (Rights of Common (Outstanding) Shareholders (continued))Cost basis adjustment for uneven splits (3:2, 5:4)Shareholder long 100 shares at $40Stock splits 3:2Hint: aggregate position value must be the same before and after adjustment
Before split: 100 shares × $40 = $4,000Calculate new cost basis: $4,000 / 150 shares = $26.67(100 shares × split ratio 3/2)
Test Prep Question #1Five directors will be elected at the annual meeting of CDE. Under the cumulative voting system, an investor with 100 shares of CDE would have
A. 100 total votes that he could cast in any way he
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A. 100 total votes that he could cast in any way he chooses among 5 directors
B. 500 votes that he could cast for each of 5 directorsC. 500 total votes; 100 votes that he could cast for each
of 5 directorsD. 500 votes that he could cast in any way he chooses
Test Prep Question #2Who is responsible for ensuring that a corporation does NOT have more shares of stock outstanding than it has been authorized to issue?
Test Prep Question #3A client has 100 shares of GHI when the stock undergoes a split. After the split, the client has
A ti t l d d i t t i th
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A. a proportionately decreased interest in the companyB. a proportionately increased interest in the companyC. no effective change in the value of the positionD. greater exposure
Test Prep Question #4The ex-date isI. set by the board of directorsII. set by FINRA or the exchangeIII. the first date an investor can purchase a security and not be entitled to
the dividend
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the dividendIV. the date the seller reimburses the buyer for the amount of the dividend
paidA. I and IIIB. I and IVC. II and IIID. II and IV
Test Prep Question #5A company is allowing its investors to purchase shares for the next 5 years at a fixed price slightly above today's market price. The company is issuing
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A. futuresB. a letter of intentC. warrantsD. call options
American Depositary Receipts (ADRs)A. US securities
1. Facilitate US citizens owning foreign sharesB. Holder bears foreign currency riskC. Depository bank is registered owner of foreign sharesD. Dividends are net of foreign withholding taxE. Generally, voting rights and preemptive rights are not