When comparing common and preferred stock, indicate whether each of the following statements is true or false. Preferred shareholders are guaranteed to receive a higher dividend amount than common shareholders. Choose... + In a year in which dividends are declared, preferred stockholders receive their portion of dividends before Choose... + common stockholders receive theirs. Preferred shareholders are guaranteed to receive a dividend in any year in which the corporation makes a Choose... + profit. For purposes of electing the company's board of directors, only preferred shareholders usually have a vote. Choose... +

When comparing common and preferred stock, indicate whether each of the following statements is true or false. Preferred shareholders are guaranteed to receive a higher dividend amount than common shareholders. Choose... + In a year in which dividends are declared, preferred stockholders receive their portion of dividends before Choose... + common stockholders receive theirs. Preferred shareholders are guaranteed to receive a dividend in any year in which the corporation makes a Choose... + profit. For purposes of electing the company's board of directors, only preferred shareholders usually have a vote. Choose... +

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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a. What is the Effective Annual Rate (EAR) and what is its purpose? b. The value of a share of common stock in a corporation is directly related to the general rights of shareholders, particularly as it applies to the right to vote for directors. Discuss at least four (4) additional rights that common shareholders have.
What does it mean when preferred stock has a cumulative feature? A.A dividend must be paid to the preferred stockholders each year. B. A dividend cannot be paid to the common stockholders. C. If dividends were not paid to preferred stockholders in previous years, these dividends must be paid before any dividends are paid to the common stockholders. D. The stockholders have the right to share in extra dividends. Please explain why the option is correct and remaining incorrect in detail explain each and every option in detail with explanation
A corporation with both preferred stock and common stock outstanding has a substantial credit balance in its retained earnings account at the beginning of the current fiscal year. Although net income for the current year is sufficient to pay the preferred dividend of $150,000 each quarter and a common dividend of $90,000 each quarter, the board of directors declares dividends only on the preferred stock. Suggest possible reasons for passing the dividends on the common stock.
Which of the following is true about share split? * It increases the total number of outstanding shares It increases the aggregate par value of shares It decreases the retained earnings of the corporation O All of the above.
9-Evaluate the following statements about preferred stock. I. For the issuer, preferred stock dividends are tax deductible.II. Preferred stock dividends can be cumulative or noncumulative.III. Preferred stock shares have a stated liquidating value. Group of answer choices I and II are correct. I and III are correct. II and III are correct i, II and III are correct.11- San Diego Power is considering a project that its CFO was surprised to find out that it has two different discount rates at which the project has a zero NPV. In this situation, the San Diego Power project is said to:
Cumulative preferred stock gives its owners a right to be paid both the current and all prior periods' unpaid dividends before any paid to common stockholders. True or False True False
which one is correct please confirm? QUESTION 26 Under dividend reinvestment plans, shareholders can automatically ____. a. transfer from retained earnings accounts to equity accounts. b. use dividends to purchase additional shares c. reduce their taxable income d. increase their cash inflows
Which of the following show the proper effect of a stock split and a stock dividend? Stock Dividend Item Total paid-in capital Item Par value per share Item Total retained earnings Item Total par value (common) Stock Split Increase Stock Split Decrease Stock Split Decrease Stock Split Decrease Increase Stock Dividend No change Stock Dividend Decrease Stock Dividend Increase
If a corporation fails to declare a dividend on cumulative preferred stock in a given year, the dividends in arrears accumulate from period to period. the dividends in arrears are recorded as liabilities. the common shareholders may still receive dividends in the current year. all of these options apply.
When preference shares are participating as to dividends, the dividend allocated to preference shareholders in the remaining balance of dividends after providing for preference and ordinary shareholders O Increases if preference shares are cumulative, and decreases if preference shares are non-cumulative O Increases, if preference shares are non-cumulative O Increases, if preference shares are cumulative O Is the same, regardless of whether preference shares are cumulative or non- cumulative
14. What are dividends in arrears? How do they affect the allocation of dividends to preference and ordinary shareholder if: a. Preference share capital are noncumulative b. Preference share capital are cumulative 15. What is the significance of book value per share? How is it computed if a. Only one class of share capital is outstanding? b. Two classes of share capital are outstanding? 16. What is earnings per share? What is its significance to the shareholders? How is it computed if a. Only one class of share capital is outstanding? b. Two classes of share capital are outstanding?