Equity Investments - Equity Investments Section 1

Avatto>>CFA Level 1>>PRACTICE QUESTIONS>>Equity Investments>>Equity Investments Section 1

96. The right to receive the standard preferred dividend plus an additional dividend based on a company’s profits exceeding a certain level, is best known as what type of dividend?

  • Option : B
  • Explanation : The right to receive the standard preferred dividend plus an additional dividend based on some condition is known as a participating dividend
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97. The type of equity voting right that works in favor of minority shareholders where each shareholder gets to cast one vote per share times the number of positions to be filled is referred to as:

  • Option : C
  • Explanation : The type of equity voting right that works in favor of minority shareholders where each shareholder gets to cast one vote per share times the number of positions to be filled is referred to as cumulative voting.
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100. Leveraged buyout investments:

  • Option : B
  • Explanation : Leveraged buyout investments provide financing to established companies. These are private investments and require a long-term commitment.
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