Financing: Equity Chapter 11 487 PRACTICE EXERCISES PE 11-1 Characteristics of Proprietorships and Partnerships Which one of the following is not a usual characteristic of either a proprietorship or a partnership? a. Limited size b. Limited life c. Ease of formation d. Unlimited liability Characteristics of Corporations Which one of the following is not a usual characteristic of a corporation? a. Limited liability b. Limited life c. Close government regulation d. Easy transferability of ownership e. Ability to raise large amounts of capital PE 11-2 Characteristies of Common Stock and Preferred Stock Which a. Preferred stockholders always have the right to vote in corporate matters. b. Common stockholders are the residual owners of the business after all other obligations have PE 11-3 one of the following statements is true regarding common stock and preferred stock? been paid c. Preferred stock is better than common stock. d. Common stockholders receive dividends before preferred stockholders e. Preferred stock can never be converted into common stock