Series 99 Corporate Actions & Reorganizations

Question 1

Which of the following best describes a mandatory corporate action?

Accepted Answer

A stock split that automatically affects all shareholders

Answer

A tender offer requiring shareholder election

Answer

A rights offering where shareholders choose to subscribe

Answer

A dividend reinvestment plan opted into by shareholders

Question 2

What is the 'record date' in the context of a corporate action?

Accepted Answer

The date by which an investor must own shares to be entitled to the benefit

Answer

The date the corporate action is announced to the public

Answer

The date on which payment or distribution actually occurs

Answer

The date trading in the security is halted pending the action

Question 3

In a 3-for-1 stock split, an investor holding 150 shares at $90 each would have after the split:

Accepted Answer

450 shares at $30 each

Answer

50 shares at $270 each

Answer

150 shares at $30 each

Answer

300 shares at $45 each

Question 4

What is the 'ex-dividend date'?

Accepted Answer

The date after which buyers of the stock will not receive the declared dividend

Answer

The date on which the dividend payment is made to shareholders

Answer

The date on which the company announces its dividend

Answer

The date the dividend is recorded in the company's books

Question 5

A reverse stock split is most likely used by a company to:

Accepted Answer

Raise the share price to meet exchange listing requirements

Answer

Increase the number of outstanding shares to raise capital

Answer

Reduce the share price to attract more retail investors

Answer

Pay dividends to shareholders without using cash

Question 6

Which of the following corporate actions is considered a 'voluntary' action?

Accepted Answer

Rights offering

Answer

Cash dividend

Answer

Stock split

Answer

Reverse stock split

Question 7

What is a 'spin-off' in the context of corporate reorganizations?

Accepted Answer

A company distributing shares of a subsidiary to its existing shareholders

Answer

A company buying back its own shares from the open market

Answer

A company merging with a competitor to form a new entity

Answer

A company issuing new shares to raise additional capital