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    SHARES - EXERCISES - Kopia

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    Ola Krupa
    1. Common stocks are sometimes called equities. They are risky for investors as stockholders only receive dividends if the company generates sufficient profits, and may receive nothing if the company loses money or cannot pay dividends. 2. Preferred stocks are designed to attract investors who do not want the greater risk of common stocks. Preferred stockholders are guaranteed to receive a fixed dividend before any payment to common stockholders. 3. If a company is liquidated, preferred stockholders will get their share of proceeds before common stockholders. Preferred stocks provide a safer investment than common stocks but do not offer large increases in share price.

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    SHARES - EXERCISES - Kopia

    Uploaded by

    Ola Krupa
    127 views6 pages
    1. Common stocks are sometimes called equities. They are risky for investors as stockholders only receive dividends if the company generates sufficient profits, and may receive nothing if the company loses money or cannot pay dividends. 2. Preferred stocks are designed to attract investors who do not want the greater risk of common stocks. Preferred stockholders are guaranteed to receive a fixed dividend before any payment to common stockholders. 3. If a company is liquidated, preferred stockholders will get their share of proceeds before common stockholders. Preferred stocks provide a safer investment than common stocks but do not offer large increases in share price.

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    SHARES_EXERCISES - Kopia

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    1. Common stocks are sometimes called equities. They are risky for investors as stockholders only receive dividends if the company generates sufficient profits, and may receive nothing if the company loses money or cannot pay dividends. 2. Preferred stocks are designed to attract investors who do not want the greater risk of common stocks. Preferred stockholders are guaranteed to receive a fixed dividend before any payment to common stockholders. 3. If a company is liquidated, preferred stockholders will get their share of proceeds before common stockholders. Preferred stocks provide a safer investment than common stocks but do not offer large increases in share price.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    127 views6 pages

    SHARES - EXERCISES - Kopia

    Uploaded by

    Ola Krupa
    1. Common stocks are sometimes called equities. They are risky for investors as stockholders only receive dividends if the company generates sufficient profits, and may receive nothing if the company loses money or cannot pay dividends. 2. Preferred stocks are designed to attract investors who do not want the greater risk of common stocks. Preferred stockholders are guaranteed to receive a fixed dividend before any payment to common stockholders. 3. If a company is liquidated, preferred stockholders will get their share of proceeds before common stockholders. Preferred stocks provide a safer investment than common stocks but do not offer large increases in share price.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    1.

    Read the text below and complete the sentences:

    Common stocks (ordinary shares – BE)

    All companies issue common stocks which are sometimes referred to as the risk
    capital of the business. This is because the stockholder receives a dividend on them
    only if the company generates sufficient profits. If the profits are insufficient or there
    are losses, the company may not pay dividends. When profits permit, each stockholder
    will receive an equal amount for each common stock. Therefore common stocks are
    also called equities. A further risk encountered by common stockholders is that if the
    company goes bust, they will be repaid, if at all, only after all other liabilities have
    been met.
    To compensate for the risk, the common stockholders may have ultimate control
    over the company, as they usually have one voting right for each stock when it comes
    to electing the Board of Directors who manage the business and are the decision
    makers.

    1. Common stocks are sometimes called ……………… .


    2. Common stockholders receive a dividend on them only if the company
    ……………… .
    3. Another term for common stocks is ………………… .
    4. Common stocks are risky because …………………….. .
    5. Common stocks usually give one ……………………… .
    6. Common stockholders elect …………………….. .
    7. Common stocks are the equivalent term for the British …………………… .

    2. Read the text below and mark the statements: true or false. Correct the false ones.

    Preferred stocks (preference shares – BE)

    Common stocks may be attractive for some investors, still those who do not like too
    much risk would opt for preferred stocks as they are safer investments. Preferred
    stocks can be divided into basic, cumulative, participating and redeemable. Basic
    preferred stockholders are entitled to receive a fixed dividend out of profits before
    anything is paid to common stockholders. As for cumulative preferred stocks, a
    dividend missed in one year is carried forward to the next. Participating preferred
    stocks are those stocks which are entitled in addition to preference dividend at a fixed
    rate, to participate in the balance of profits with equity stockholders after they get a
    fixed rate of dividend on their stocks. Most preferred stocks do not give many or give
    no voting rights as they ensure fixed dividend payments.
    Redeemable preferred stocks can be bought back by the company in a few years’
    time. Companies issue redeemable stocks that pay high dividends but they want to be
    able to cancel the stocks in the future. The stocks can be redeemable at a fixed date or
    upon an expected event, such as the death of the owner.

    1. Preference shares are the British term for the American preferred stocks.
    ……………….
    2. Preferred stocks are more risky investments than common stocks.
    ……………
    3. There is only one kind of preferred stocks. ………………
    4. Preferred stockholders are entitled to receive a fixed dividend before common
    stockholders. ……………….
    5. If the company is unable to pay out dividends one year to cumulative preferred
    stockholders, they lose their right to the dividend.
    ……………..
    6. Participating preferred stockholders have no influence on the company
    management. …………….
    7. The company can buy back its redeemable preferred stocks anytime it has a
    sufficient capital. ……………

    3. Read the text below and choose the correct answer.

    Corporate bonds (debentures - BE)

    A private limited company or public limited company can also issue corporate bonds.
    They are not like stocks since corporate bondholders do not have a stake in the
    company. Corporate bonds are simply loans to the company on which a fixed rate of
    interest is paid before preferred or common stockholders receive anything. They are
    normally secured against some tangible assets owned by the company. Therefore in
    case of bankruptcy the assets must be sold and the proceeds are used to repay the
    corporate bondholders. If bondholders do not receive their agreed annual interest, they
    can force the company into liquidation.

    1. A company can issue corporate bonds in order to


    a) make a profit
    b) lend funds to bondholders
    c) borrow funds from bondholders
    2. Corporate bonds
    a) do not give their holders any stake in the company
    b) give their holders voting rights to control the Board of Directors
    c) can only be bought by the company stockholders
    3. Corporate bondholders receive
    a) a fixed rate of interest
    b) a dividend
    c) a share of the profits
    4. If the company goes bankrupt bondholders must be paid
    a) after all the stockholders
    b) before any of the stockholders
    c) on a specific date
    5. Corporate bonds
    a) are very risky investments
    b) are safer than shares
    c) always give a high yield

    4. Fill in the gaps in the text given below using the following words:
    (price, equities, risk, stocks, profits, earnings, dividend, speculative)

    Common stocks are sometimes called (1) _____. There is some risk involved when
    investing in those stocks as they may not give any (2) _____ if the company does not
    make sufficient (3)_______ . Of course if the company does well the (4)______ may
    be very high and the price of the (5) ______ may rocket. For instance, at one time the
    (6) _______ of stocks of Facebook almost tripled in one week and the same happened
    in case of Snapchat. Such stocks are (7)______ in nature and for this reason they are
    sometimes called venture or (8)_______ capital.

    5. Fill in the gaps in the text given below using the following words:
    (irredeemable, safer, bust, cumulative, dividends (2), in (2), up, capital,
    preferred, interest, annum, redeemable)

    Preference shareholders have preference in the payment of (1)______


    and also (2)______ the repayment of their (3)______ should the company go
    (4)______. However, preference shares are (5)_____ than ordinary shares but they do
    not offer huge increases (6)_____ share prices. Preference shares or (7)______ stocks
    usually carry a fixed rate of (8)______ per (9) _______. In case of (10)_______
    preference shares their losses in income in bad years are made (11)_____ in good
    years while participating preference shares entitle to additional (12)_____ if the
    profits are above a certain level; the (13)_____ preference shares may be re-sold to the
    company after a given time and are sometimes used to start up a company; while
    (14)______ shares cannot be re-sold to the company but they can be sold on the stock
    exchange.

    6. Fill in the gaps in the text given below using the following words:
    (liquidation, creditors, bonds, safer, loans, interest, calculated, winds,
    mortgages, sufficient, secured)

    Debentures or corporate (1)_____ are not shares but (2)______. This


    means that those who provide such funds are not owners of the company
    but (3)______.They must be paid their fixed (4)______ even if the
    company does not generate (5)______ profits because such interest is
    treated as a cost item before profits are (6)______. Moreover the
    bondholders are the first to receive their money back if the company
    (7)______ up or goes into (8)______. If the debentures are (9)______ it
    means they are (10)______ against some property, which makes them
    even (11)_____.
    7 Put the scrambled words and phrases in correct order to create proper sentence:

    1. Preferred stocks / from investors/ are designed/ who/ to gather funds/do


    not want / common stocks/ connected with/ to take the greater risk
    2. /a fixed dividend /Preferred stocks/ guarantee/ which / before/ receive/
    common stockholders/ is payable/ any payment.
    3. /the company/ If / is liquidated/ their share of proceeds/ will get/ the
    preferred stockholders /do/ before/ the common stockholders/
    4. /the articles of association/ The voting rights of/ according to/ vary/
    preferred stockholders/.
    5. /a stockholder/ As a rule/ gets/ a fixed return on an investment/ who/ a
    voting right/ does not have/.
    6. /preferred stockholders/limited voting rights/ In some companies/ have/
    /perhaps/ for every five stocks/ one vote/ the common stockholders’/ for
    every stock/as against/ one vote/.

    8. Translate the following sentences into English:

    1. Posiadacze akcji zwykłych mogą wybierać zarząd spółki, gdyż mają prawa głosu w
    zamian za podjęte ryzyko inwestycyjne.
    2. Akcje zwykłe uprawniają posiadaczy do dywidendy wypłacanej z zysków firmy.
    3. Jeśli spółka nie wygeneruje odpowiedniego zysku lub poniesie straty, może
    zawiesić wypłatę dywidendy.
    4. Obligacje Skarbu Państwa są względnie bezpieczną inwestycją, gdyż gwarantują
    ustaloną stopę oprocentowania oraz zwrot całości zainwestowanego kapitału.
    5. Obligacje emitowane przez spółki akcyjne są mniej bezpieczne, ale mogą przynieść
    wyższe zyski.
    6. Uprzywilejowane akcje zwrotne mogą być odkupione przez spółkę w terminie
    ustalonym w statucie spółki.
    7. Akcje bezzwrotne mogą być jedynie kupowane lub sprzedawane za pośrednictwem
    giełdy papierów wartościowych.
    8. Dość często obligacje korporacyjne są zabezpieczone aktywami trwałymi, takimi
    jak nieruchomości.
    9. W przypadku upadłości spółki, takie aktywa będą sprzedane, a środki wykorzystane
    do spłacenia obligacji.
    10. Jeśli nie boisz się ryzyka i chcesz dużych zysków, inwestuj w akcje
    zwykłe.
    11. Jeśli chcesz inwestować długoterminowo, bezpieczniej, ale z
    mniejszymi zyskami, kupuj obligacje skarbowe, korporacyjne lub
    akcje uprzywilejowane.

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