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All other things equal, what is the effect on earnings per share when a corporation acquires shares of its own stock on the open market? 7 Multiple Choice 0136 Decrease. Increase. No effect if the shares are held as treasury shares. Increase only if the shares are considered to be retired. Next > K Prev 17 of 44

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Question 1

Question 15 (Answer the next questions.15 to 22 using the following information.) EBV is considering a $6M Series A investment in Newco. EBV proposes to structure the investment as 5M shares of convertible preferred stock. The founder and employees of Newco have claims on 10M shares of common stock. Thus, following the Series A investment. Newco will have 10M common shares outstanding and would have 15M shares outstanding on conversion of the CP. EBV estimates a 30 percent probability for a successful exit, with an expected exit time in 5 years and an exit valuation of $250M. The $100M EBV fund has annual fees of 2 percent for each of its 10 years of life and earns percent carried interest on all profits. Assume the following: The cost of venture capital is 10%: Expected GVM -2.5; expected retention for first round investors is 50%. GP% - 10%. Apply standard assumptions listed in the textbook and lecture notes for additional data and information required for the valuation. What is the…

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The excess of issue price over par of common stock is termed a(n) a. income O b. premium C. discount O d. deficit

F1

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Do #3

32 A company is preparing financial statements immediately after the holders of convertible preferred stock convert their shares to common stock. There has been no change to the company's redeemable preferred stock. What is the effect of the conversion? An increase in liabilities on the balance sheet A decrease in earnings per share A gain if the dollar amounts of preferred stock and additional paid-in capital in excess of par exceed the number of common shares times the par value of the common stock A loss if the dollar amounts of preferred stock and additional paid-in capital in excess of par are less than the number of common shares times the par value of the common stock

Provide correct answer the accounting question

Question # 2:            Which of the following statements is CORRECT? a. If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction. b. If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction. c. The IPO market is an example of a primary market. d. Question # 3:    Which of the following statements is CORRECT? a. Capital market instruments include both long-term debt and common stocks. b. An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birthday gift. c. The NYSE does not exist as a physical location; rather, it represents a loose collection of dealers who trade stocks electronically. d. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.…

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What is redeemable shares? What is the dfferences between ordinary shares? What is share redemption. What is buy back?

In what way is a preferred stock usually more similar to a bond than to a common stock? O a. Preferred stockholders are more risky than common stocks O b. Preferred stockholders elect the board of directors of the organization O c. Preferred bondholders participate in the growth of the company through increases in dividends and stock prices O d. Preferred stockholders are typical entitled fixed payments O e. If the company were to go into liquidation, preferred stockholders will be entitled to payments after common stockholders are paid-off

2 4. The Zerro Company has issued $100,000 of Redeemable Preferred Stock. The Preferred Stock would be redeemable at the option of the shareholder at any point for the value the stock was originally sold at. The holder of the stock would be under no obligation to redeem any of the stock. How would GAAP and IFRS classify this stock on the Balance Sheet. a. GAAP Equity b. Liability C. Equity d. Liability IFRS Equity Liability Liability Equity The date stack is Decembe 2025. How wo this 5. The Day Corp. holds 1,000 shares of its $5 par value common stock as treasury stock that the company purchased in 2025 for $150,000. On December 12, 2026, Day reissued all 1,000 shares for $160,000. Under the cost method of accounting for treasury stock, the reissuance journal entry resulted in a: a. b. C. d. 20 e. 6. No Effect Credit to Common Stock for $10,000. Credit to Treasury Stock for $160,000. Credit to Gain on Sale of $10,000. Credit to Paid in Excess of $10,000. None of the above are correct.…

A company declares and distributes a 30% common stock dividend to common stockholders. By how much will the retained earnings balance be affected as a result of this transaction (note: consider any effects associated with closing entries)? Select one: O a. Retained earnings would not be reduced as a result of this transaction O b. Market value of the shares issued Book value of the shares issued Od. Minimum legal requirement O e. Par value of the shares issued Clear my choice

c) Let us say, the stock exchange listing requirements stipulate that once the share of your company trades at a price of $20 or less, the share will be delisted from the exchange and no further trades will be allowed. You observe that currently the share of your company is trading at around $25 per share on the stock exchange. What do you recommend in such a situation: A stock split or a reverse stock-split? Why?

12. When a company retires its own common shares, the company must a.decrease the common share account balances by the original issue price. b.record a gain or loss depending on the difference between original selling price and repurchase cost. c.get the approval of the government to do so. d.issue a different class of shares to the former shareholders.

is the first time that a company sells its shares of stock to the public. stock auction O initial public offering O private exchange O first-mover offering A(n)