Statement I: Common shares are given preemptive rights so as not to dilute the percentage of ownership of stockholders. Statement II: Preferred shares is called a hybrid security because it has the features of both asset and liability. Statements I and II are true. Statement II is true. Statements I and II are false. Statement I is true.
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Statement I: Common shares are given preemptive rights so as not to dilute the percentage of ownership of stockholders.
Statement II:
Statements I and II are true.
Statement II is true.
Statements I and II are false.
Statement I is true.
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- Access the glossary (“Master Glossary”) to answer the following. a. What is a “convertible security”? b. What is a “stock dividend”? c. What is a “stock split”? d. What are “participation rights”?Which of the following is False in regards to Share premium account? a. It will be shown under the shareholders equity b. It will be collected when the issue price is more than the par value of shares c. It will be collected when the par value of share is more than the issue price d. It will not be shown under current assets in the balance sheetingPreferred stock: a. Is always recorded as a liability. b. Is always recorded as part of stockholders’ equity. c. Can have features of both liabilities and stockholders’ equity. d. Is not included in either liabilities or stockholders’ equity.
- (I) A share of common stock in a firm represents an ownership interest in that firm. (II) Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders, but after that of bondholders. A. (I) is true, (II) false B. (I) is false, (II) true C. Both are true D. Both are falsePART A: Common stock has seniority relative to preferred stock. True False PART B: Issuance or flotation costs are the costs investors pay to brokers when they purchase common stock. True False4. Critically examine the advantages and disadvantages ofequity shares.5. Discuss the features of equity shares. 6. What are the merits of the differed shares?
- Which of the following is not a characteristic that sets preferred stock apart from common stock?A. voting rightsB. dividend paymentsC. transferabilityD. ownershipAn entity need not disclose... a. A description of the nature and purpose of each reserve within equity. b. Fair value per share, or that the shares have no fair value. c. The rights, preferences and restrictions attaching to that class including restrictions on the distribution of dividends and the repayment of capital. d. A reconciliation of the number of shares outstanding at the beginning and at the end of the period.Which of the following statements correctly describe characteristics of preference shares? Group of answer choices A. The required return on preference equity is expected to be less than the required return from ordinary equity. B. None of the other statements are correct C. A participating preference share participates in the interest payments paid to debtholders. D. Preference shares are called “hybrid” securities because they display characteristics of both short-term and long-term debt.
- Why is preferred stock referred to as a hybrid security? It is often said to combine the worst features of common stock and bonds. What is meant by this statement? How does a common stockholder receive two types of returns?5. It is a financial security that evidences your right to vote and receive residual interests? a. Bonds b. Derivatives c. Common shares d. Preferred shares O e. None of the aboveS1: The trust fund doctrine holds that share capital of a corporation is considered a trust fund for the protection of the shareholders. S2: A no par share is one without any value appearing on the face of the stock certificate, thus, it is issued for free. A.Both statements are true B. Both statements are false C. Only S1 is true D. Only S2 is true