Which of the following statements is NOT correct? A firm's preference shareholders:O a.Are treated equally as all other preference shareholders.O b. Are entitled to perpetual cash flows.O C. Are entitled to a fixed dividend when there is sufficient retained earnings.O d. Vote at the firm's annual general meeting.O e. Rank ahead of ordinary shareholders in the case of bankruptcy.Which of the following statements about Depreciation is NOT correct?Oa.The book (carrying) value of a fixed asset is equal to the historical cost minus accumulated depreciation.O b. Higher depreciation has the effect of reducing Net Income but increasing Cash Flow from Assets.For tax purposes, the depreciation calculation must exclude any residual or salvage value of the asset.O d. Depreciation is subtracted from Cash Flow From Assets because it is a cash flow related to Capital expendituree.If the depreciation method used for tax purposes is changed from diminishing value to straight line, so less depreciationoccurs this year and more occurs in later years, then this year's Cash Flow from Assets will decrease.

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Answered: Which of the following statements is…

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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8. Which statement is true? Group of answer choices a. Preferred stock is similar to corporate bonds because the corporation usually pays the holders of the securities a fixed amount. b. Preferred stockholders have priority over bondholders when it comes to the payment of c. Preferred stock is similar to corporate bonds because dividends on preferred stock, like interest on bonds, are a tax-deductible expense to the corporation. d. Preferred stockholders are considered to be the true owners of corporations.
As a shareholder, preemptive rights are important because it Select one: a. results in higher dividends per share. b. is included in every corporate charter. c. allows managers to buy additional shares below the current market price. d. protects bondholders and thus enables the firm to issue debt with relatively low interest rates e. protects current shareholders against a dilution of ownership interests. You recently sold 100 shares of Pfizer stock, and the transfer was made through a broker. This is an example of: Select one: a. A secondary market transaction. b. A primary market transaction. c. A money market transaction. d. A futures market transaction. e. An over-the-counter market transaction. Which of the following statements is CORRECT? Select one: a. If a coupon bond is selling at par, its current yield equals its yield to maturity. b. If rates fall after its issue, a zero-coupon bond could trade at a price above its maturity (or par) value. c. If rates fall rapidly, a…
Which of the following statements is NOT CORRECT? "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the fiem's shares. Publicy owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public," and the market for such stock is called he new issue market. It is possible for a firm to go public and yet not raise any additional new capital When a corporation's shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the fim is "closely, or privately, held
The par value of common stock represents a. the estimated fair value of the stock when it was issued. b. the liability ceiling of a shareholder when a company undergoes bankruptcy proceedings. c. the total value of the stock that must be entered in the issuing corporation’s records. d. the amount that must be recorded on the issuing corporation’s record as paid-in capital.
Match each of the following stockholders' equity concepts to the appropriate term (a-h). Question 5 options: Document which formally creates a corporation Corporate income distributed to stockholders The rules and procedures for conducting a corporation's affairs Group which meets periodically to establish corporate policies A legal entity, separate from the people who create and operate it A company whose shares can be bought and sold in public markets A company whose shares are not bought or sold in public markets Creditors cannot pursue stockholders' personal assets to satisfy claims 1. articles of incorporation 2. limited liability 3. bylaws 4. corporation 5. public corporation 6. board of directors 7. private corporation 8. dividends
Preference shareholders have O a Preferential right as to dividend only Ob. Preferential right in the management Oc. Preferential right as to repayment of capital at the time of liquidation of the company Od. Preferential right as to dividend and repayment of capital at the time of liquidation of the Company
True or False 1. Only the sole proprietorship and partnership forms of business organization can resort to borrowing as their source of funds. 2. Only a corporation can issue shares of stock to the public as a source of its capital. 3. Corporation has more options on the manner it raises its capitalization, as compared to other forms of business organization. 4. A bond certificate is a contract of debt. 5. Stockholders are investees in a corporation.
76. Whom of the following is paid at last on the dissolution of a company? A.Reserve creditor B.Equity shareholder C.Preference shareholder D.Debenture holder
Bondholders are _______________________ rather than owners of the corporations. A. creditors B. stock holders C. partners D. capitalists E. All of the above
Write T or F. Then briefly explain. In a corporation, minority shareholders are compliant to the wishes of the majority.
Each stockholder in a corporation has a separate capital account in the stockholders' equity section of the balance sheet Select one: True False
The right of a shareholder to share proportionally in any new stock issue is called a/an ____________ right. Select one: a. coattail b. preemptive c. indenture d. secured e. charter

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