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18. The owners of a corporation are its shareholders. If a corporation has only one class of shares, they typically are labeled common shares. Each of the following are ownership rights held by common shareholders, unless specifically withheld by agreement except: A. The right to vote on policy issues. B. The right to share in profits when dividends are declared (in proportion to the percentage of shares owned by the shareholder). C. The right to dividends equal to a stated rate time par value (if dividends are paid). D. The right to share in the distribution of any assets remaining at liquidation after other claims are satisfied. Rationale for your answer 19. If a futures contract is used to hedge a debt sale, and interest rates go down causing debt security prices to rise, the potential benefit of being able to issue debt at that lower interest rate (higher price) will be offset by a loss on the futures position. This statement is: True False Rationale for your answer 20. Hedging is used to deal with exposure to: A. Fair value risk. B. Cash flow risk. C. Foreign exchange risk. D. All of these are correct. Rationale for your answer 21. Disclosure notes would not include: A. Depreciation methods used and estimated useful life. B. Definition of cash equivalents. C. Details of pension plans. D. Data to adjust the financial statements so that they are not misleading. Rationale for your answer 22. The Management Discussion and Analysis section of the annual report can best be described as: A. Frank but objective. B. Independent but precise. C. Legalistic and lengthy. D. Biased but informative. Rationale for your answer 23. The quick ratio is: A. The liquidity ratio divided by the equity ratio. B. Current assets minus inventory divided by current liabilities minus accounts payable. C. Current assets minus inventory and prepaid items divided by current liabilities. D. Cash divided by accounts payable. Rationale for your answer 24. Recent financial statement data for Harmony Health Foods (HHF) Inc. is shown below. HHF's debt-to-equity ratio is: A. 0.75. B. 1.13. C. 0.53. D. 1.80. Rationale for your answer 25. Which of the following is not a required segment reporting disclosure according to International Accounting Standards? A. Segment profit or loss. B. Segment assets. C. Segment liabilities. D. All are required disclosures. Rationale for your answer

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