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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following statements(s) is (are) true regarding preferred stock? a. Preferred stock dividends are not a liability of the firm unless they are declared b. Preferred stock dividends are paid after dividends are paid to common stockholders c. Like bonds, preferred stocks have maturity d. Preferred stock does carry voting rights
Which one of the following accurately describes the features of preferred stock? Preferred dividends must be paid before dividends can be paid to common stockholders. A frim can go bankrupt for not paying preferred dividends. Preferred dividends are noncumulative. Preferred dividends cannot be deferred indefinitely. Similar to common stock, preferred stock generally carries voting rights.
Preferred stock is a hybrid security, because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with debt and which is consistent with equity. Characteristics Debt Equity Has a par, or face, value. Failure to pay a preferred dividend does not send the firm into bankruptcy. Consider the case of Tamin Enterprises: At the present time, Tamin Enterprises does not have any preferred stock outstanding but is looking to include preferred stock in its capital structure in the future. Tamin has found some institutional investors that are willing to purchase its preferred stock issue provided that it pays a perpetual dividend of $14 per share. If the investors pay $130.45 per share for their investment, then Tamin’s cost of preferred stock (rounded to four decimal places) will be .
Dual class stock is generally designed to Provide bigger dividends to majority owners. Help minority owners obtain board representation. Protect the voting rights of managing owners. Improve marketability of the shares. A shareholder in a troubled corporation is not likely to lose his/her: Money invested in the stock. Personal assets. Dividends declared. Par value. 3. An order to the New York Stock Exchange to buy or sell at the best price available is called: - A limit order - A stop order - a market order - a GTC order
Which of the following statements is true? Group of answer choices a. Dividend payments are attractive to executives who hold many executive stock options that were awarded to them by their firms b.Executives and other insiders benefit most by being able to tender their shares in an open market repurchase since they usually are privy to information that is not available to the general public c.Empirical research suggests that small, retail investors prefer stock repurchases to dividend payments d. a firm does not pay dividends, some institutional investors are prohibited from investing it the firmʹs equity
In some circumstances, corporations will buy back their own stock – called Treasury Stock. Identify three reasons why a company may choose to do so.
Mf4. All of the following are advantages of a stock dividend distribution to shareholders on account as of ex-dividend date except? a. preserves cash balances of the firm to be used for other investment opportunities b. decrease in share price may attract new investors to raise additional capital c. bonus share distribution dilutes the share price d. not treated as a taxable event for investors and shareholders until sold e. none of the above
Cumulative preferred stock O requires dividends in arrears to be paid before the firm can pay dividends on common. O has a right to vote cumulatively. O has a claim to dividends before bonds. Ohas a higher required return than common stock.
Managers of firms may consider a stock repurchase when they believe their stock is ____ by the market, or a offering when they believe their stock is by the market. undervalued; undervalued O overvalued; overvalued O undervalued; overvalued O overvalued; undervalued O none of the above 2255
A major difference between common and preferred stock Seleccione una: a. is that common stockholder have voting rights and preferred stockholders do not. b. is In the case of liquidation after a bankruptcy, common stockholder will be paid before preferred stockholders. c. is that preferred stockholder have voting rights and common stockholders do not. O d. is that common stock have a fixed dividend and preferred stock does not pay a dividend.
1. I need help with multiple choice finance home work question Which of the following is not a right of those who own common shares? Obtain proportionate dividends once announced. Obtain periodic interest. Right to purchase more shares if company issues new shares. Vote for company directors. Residual proceeds from asset disposal in liquidation.
In calculating earnings per share, a company uses the treasury stock method when a. it recognizes the assumed impact of exercising outstanding warrants. b. it develops a methodology to handle the premium paid on exercised share options. c. it needs to value the cash received for a convertible bond. d. it needs to value treasury stock repurchased during the year.