corporation might have treasury stock listed on their financials for all the following reasons except: A. they wish to control the market price B. they wish to be a majority stockholder C. they wish to limit dividend payments D. they wish to avoid takeover

corporation might have treasury stock listed on their financials for all the following reasons except: A. they wish to control the market price B. they wish to be a majority stockholder C. they wish to limit dividend payments D. they wish to avoid takeover

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter20: Financing With Derivatives

Section: Chapter Questions

Problem 10QTD

See similar textbooks

Related questions

Q: Which account cannot be used if a corporation has only one class of shares? a. Preference shares…

A: When the company sells its share in order to accumulate capital such amount is called share capital.…

Q: The excess of issue price over par of common stock is termed a(n)

A: Solution 1: The excess of issue price over common stock is termed as "Premium" When common stock…

Q: Which of the following statements is NOT CORRECT? "Going public" establishes a firm's true intrinsic…

A: Companies can raise funds from the public.

Q: Which of the following statements is false? Group of answer choices Stocks are long-term securities…

A: Stocks are ownership while bonds are liabilities to the firm

Q: issued shares to another company or individual. This a transaction that would be traded in the…

A: There are primary as well as secondary market

Q: Identify the term being referred to: A theory that states that how high or low an entity pays out…

A: Solution:- There are two theories related to dividend- Dividend relevance theory and dividend…

Q: Which is false about long-term sources of a firm’s capital? a. Preferred shares are securities…

A: Solution:- Long term sources of capital are those sources of funds from where the funds are acquired…

Q: What is the distinction between that of Paid-in-Capital and Retained Earnings, in both differences…

A: Paid in capital means the amount contributed by share holder in company as share capital Retained…

Q: a Rights Issue? (a) The sale of rights to a bond coupon. (b) The right of shareholders to have the…

A: Right issue is the way of raising additional capital via issuance of new equity shares to existing…

Q: Which of the following is not an advantage of going public

A: Going 'public' means that a privately held company becomes listed after offering an IPO and hence…

Q: Which of the following is NOT a characteristic of common stock? O tock represents partial ownership…

A: Common stock forms part of the capital structure of the company. It provides funds for managing…

Q: A company may repurchase its own shares for all of the following reasons, except to reduce the…

A: Repurchase of shares refers to the business activity through which the company buys back its own…

Q: How is the accounting for a purchase of a company’s own stock (treasury stock) different from the…

A: A company’s stock is the shares a company holds or the shares on which a company has its ownership…

Q: Firms raise capital from investors by issuing shares in the primary markets. Does this imply that…

A: in the secondary market, securities that have already been issued will be bought and sold. The…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: Introduction: Capital gain is referred as any profit or gain that coming from the sale of a ‘capital…

Q: or what reason might a company purchase treasury stock? To increase shareholder liquidity To…

A: Treasury shared means purchasing own shares of company.

Q: Companies are more apt to choose repurchases over dividends if doing so will enable them to I. take…

A: When a company decides to buy back its own stock from the market, this is known as a share…

Q: Which of the following statements is not true about preferred stock? A.The rate of dividend is…

A: The term "stock" refers to the ownership or equity of a firm. The two categories of equity are…

Q: Which feature is not applicable to common stock ownership?a. Right to receive dividends before…

A: Common stock: It can be defined as the form of corporate equity that represents the ownership…

Q: In some circumstances, corporations will buy back their own stock – called Treasury Stock. Identify…

A: Treasury stock is also written as treasury shares or reacquired shares or stock. These are the…

Q: Is there a type of stock preferable over the other? Should a corporation also utilize borrowing if…

A: Equity Stock represents the equity shares of a company. Equity shares are the part of company owned…

Q: If a publicly traded company is trying to maximize its perceived value to decision makers external…

A: Assets are the resources of the organization which is useful for producing goods and services.…

Q: Which of the following describes preferred stock? a. Stock that sells for a very high price b.…

A: Preference stocks are stocks issued by the company to the shareholders with dividends. These are…

Q: 1. What are the possible effects of issuing right shares on the company financial health?

A: A company issues the right shares to the current shareholders when it needs more capital, either in…

Q: ecrease the per-share book value of the stock held by shareholders b. To increase the per-share…

A: A share repurchase may have an impact on a company's BVPS. Because BVPS is used to calculate the…

Q: Which one of the following statements is TRUE? a. Creditors have a claim on a firm's earning…

A: Charter is a legal document that contain details of the governance, structure, objectives and other…

Question

A corporation might have treasury stock listed on their financials for all the following reasons except: A. they wish to control the market price B. they wish to be a majority stockholder C. they wish to limit dividend payments D. they wish to avoid takeover

Definition Definition Stock repurchased from the stockholders by the company that once issued it. The repurchase of the stock reduces the stockholder's equity balance on the balance sheet. Treasury stocks are an important constituent of stockholder's equity but do not carry any voting rights.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Why would a corporation redeem its stock? a. To decrease the per-share book value of the stock held by shareholders b. To increase the per-share price of the stock on the open market c. To increase the per-share book value of the stock held by the corporation d. To decrease the per-share book value of the stock on the open market
Indicate whether the following statements are true or false. If the statementis false, explain why.a. If a firm repurchases its stock in the open market, the shareholders whotender the stock are subject to capital gains taxes.
Which of the following is not an advantage of going public? a. Access to capital. b. Compliance. c. Use of stock options. d. Liquidity for owners’ investments
For what reason might a company purchase treasury stock? To increase shareholder liquidity To execute an acquisition through a share exchange To increase the number of outstanding shares of stock To reduce future income taxes
What is a Rights Issue?(a) The sale of rights to a bond coupon. (b) The right of shareholders to have the company buy back their shares. (c) It is where the firm raises additional equity capital after the IPO. (d) It is a sale of priority rights to creditors in the event of the company being wound up.
Which feature is not applicable to common stock ownership?a. Right to receive dividends before preferred stockshareholders.b. Right to vote on appointment of external auditor.c. Right to receive residual assets of the company shouldit cease operations.d. All of the above are applicable to common stockownership.
Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
How does a stock split affect the balance sheet of a corporation?
Why would a company repurchase its own stock?
Which is false about long-term sources of a firm’s capital? a. Preferred shares are securities whose intrinsic value is based on prospective earnings b. Some types of bank loans may require collateral from potential debtors c. Retained earnings are internal sources of funding that can be utilized for expansion d. All types of corporations may issue equity securities to the public
What is the distinction between that of Paid-in-Capital and Retained Earnings, in both differences and similarities? What characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? When would a company be able to declare a cash dividend? How many main categories of paid-in capital are there? And what are? What is the definition of the term par value of stock?
Which of the following describes preferred stock? a. Stock that sells for a very high price b. Stock that is sold to employees of the company as a performance incentive c. Stock which gives shareholders certain preferences and advantages over common stock d. Stock that is purchased by the corporation for investment purposes