Book value per share is ____ oriented while market value per share is ____oriented. * a. short term; long term b. long term; short term c. future; historical d. historical; future 2. When a corporation’s earnings and dividends are exemplary good, which type of preference shares will yield the highest benefit for ordinary shareholders? * a. noncumulative, nonparticipating b. noncumulative, fully participating c. cumulative, nonparticipating d. cumulative, participating e. cumulative, partially participating 3. The book value per share * a. is usually a close approximation of the market price per share. b. is the same as the par value per share. c. may be useful in determining the trend of a shareholders’ per share equity in a corporation. d. always falls within the annual range of a c
1. Book value per share is ____ oriented while market value per share is ____oriented. *
a. short term; long term
b. long term; short term
c. future; historical
d. historical; future
2. When a corporation’s earnings and dividends are exemplary good, which type of
a. noncumulative, nonparticipating
b. noncumulative, fully participating
c. cumulative, nonparticipating
d. cumulative, participating
e. cumulative, partially participating
3. The book value per share *
a. is usually a close approximation of the market price per share.
b. is the same as the par value per share.
c. may be useful in determining the trend of a shareholders’ per share equity in a corporation.
d. always falls within the annual range of a company's market value per share.
4. Which statement is incorrect? *
a. Book value per share is the claim of a shareholder in the net assets of the corporation for every share held in the corporation.
b. If a corporation has 2 classes of shareholders, the book value per share should be computed for both preference shares and ordinary shares.
c. Book value per share assumes that assets are realized at book values and liabilities are liquidated at book values. Total gains (losses) on realization of assets and liquidation of liabilities, if there are any, are assumed to sum up to zero.
d. Excess over par refers to the amount of shareholders’ equity in excess of the total par value of the preference shares and ordinary shares issued by the corporation.
e. none of the above
5. Which statement is incorrect? *
a. Dilution is an increase in earnings per share when convertible instruments are converted to ordinary shares.
b. Diluted EPS is required when there are potential shares outstanding.
c. Dilutive potential shares shall be deemed to have been converted into shares at the start of the period or, if later, the date of the issue of the potential shares
d. Options and warrants are dilutive, when they would result in the issue of shares for less than the average market price of shares during the period.
e. none of the above
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