Study Question of the Week: December 6, 2012 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 79, Series 24, Series 62 and Series 82. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 79, Series 24, Series 62 and Series 82):

An individual or group acting together must file a Schedule 13D form when:

Answers:

A: their stockholdings reach 5% of a corporation’s outstanding shares of common stock

B: their stockholdings reach 10% of a corporation’s outstanding shares of common stock

C: their stockholdings reach 20% of a corporation’s outstanding shares of common stock

D: their stockholdings reach 50% of a corporation’s outstanding shares of common stock

Correct Answer: A

Rationale: Section 13(d) requires an individual or group acting together to file a 13D form when their stockholdings reach 5% of a corporation’s outstanding shares of common stock. This rule gives a corporation that may be the target of an acquisition fair warning in advance. Schedule 13D requires the group to disclose the number of shares owned, background information on the individual filing the form, the purpose of the transaction, and the source of the funds to finance the acquisition of the shares. Schedule 13D must be filed within 10 days of the acquisition of the stock.

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