Which of the following statements are true regarding corporations? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. ✔The sale of shares from one stockholder to another does not impact operations. An exception is when it changes the makeup of directors. ? It has many of the same rights as an individual. Stockholders do not have the power to bind the corporation to contracts. ? Stockholders are expected to hire and fire key executives. Owners are personally liable for corporate debts. ? It is a separate legal entity. ? Owners are not agents of the corporation.

Which of the following statements are true regarding corporations? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. ✔The sale of shares from one stockholder to another does not impact operations. An exception is when it changes the makeup of directors. ? It has many of the same rights as an individual. Stockholders do not have the power to bind the corporation to contracts. ? Stockholders are expected to hire and fire key executives. Owners are personally liable for corporate debts. ? It is a separate legal entity. ? Owners are not agents of the corporation.

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 statement is incorrect? Classified (staggered) board structure makes is difficult to replace current board of directors, and considered as one of the anti-takeover provisions. Vertical acquisition is the case where acquirer and target operate in the different stage of the procession process. Ex-dividend date is defined as the date that is two business days before record date. Ignoring taxes and assuming no market frictions, stock repurchase increases shareholder wealth more than dividend.
While corporations might have multiple issues of bonds or preferred stock, no corporations have multiple classes of common stock. While corporations might have multiple issues of bonds or preferred stock, no corporations have multiple classes of common stock. True False Give typing answer with explanation and conclusion
Which of the following statements is true?a. The outstanding number of shares is the maximum number of shares that can beissued by a corporation.b. The shares that are in the hands of the stockholders are said to be outstanding.c. It is very unlikely that corporations will have more than one class of stock outstanding.d. Preferred stock is stock that has been retired.
In some circumstances, corporations will buy back their own stock – called Treasury Stock. Identify three reasons why a company may choose to do so.
When comparing common stock and preferred stock of the same company, it is fair to say that A. the Securities and Exchange Commission allows only one class of common stock. B. companies sometimes have two different classes of shares with unequal rights to dividends and votes. C. investors are indifferent between class A and class B shares. D. all shares, no matter how many classes, are all created with the same equal rights.
Which of the following statements about preferred shares is inaccurate? Select one: a. Preferred shares carry credit ratings. b. In the event of liquidation of a firm’s assets, preferred shareholders are paid out before common shareholders. c. Preferred share dividends are always cumulative. d. Preferred shares are often callable and puttable. e. Preferred share dividend income from another Canadian corporation is tax-exempt.
all of the following are true about the issuance of non-voting common stock except a. it has been issued when the corporation wishes to raise capital through the sale of common stock but does not want to relinquish its voting control o b. it has been issued as a defense against an unfriendly takeover c it tends to result in the dilution of voting rights of current stockholders od. it tends to result in unequal voting rights among the shareholders
(short answer) If you were the Chief Financial Officer of a public company that was issuing new common stock, which type of underwiring would you prefer, and why?
Identify the term being referred to: A theory that states that shareholders will encourage the board of directors to declare as much dividends as possible so that only the minimum amount of cash is available to the entity. This is to prevent excessive spending by managers. *
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Which of the following statements is NOT correct about the rights granted to common stockholders? Group of answer choices a. Stockholders may transfer their right to vote to a second party by means of a proxy. b. Dividends due to common stockholders are cumulative. c. Common stockholders have the right to elect a firm's directors. d. In large, publicly traded firms, managers typically have some stock but their personal holdings are generally insufficient to win voting control.
16. Which of the following statements is NOT correct about the rights granted to common stockholders? a. Stockholders may transfer their right to vote to a second party by means of a proxy. b. Dividends due to common stockholders are cumulative. c. Common stockholders have the right to elect a firm's directors. d. In large, publicly traded firms, managers typically have some stock but their personal holdings are generally insufficient to win voting control.