Which statement is true regarding the new Companies Act 71 of 2008? Select one: a. Companies are no longer allowed to issue par value shares. b. Companies are now expected to be managed by shareholders. c. Companies are no longer allowed to issue capitalization shares. d. Companies are only permitted to issue redeemable Preference share

Which statement is true regarding the new Companies Act 71 of 2008? Select one: a. Companies are no longer allowed to issue par value shares. b. Companies are now expected to be managed by shareholders. c. Companies are no longer allowed to issue capitalization shares. d. Companies are only permitted to issue redeemable Preference share

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 is NOT a reason companies purchase their own stock as treasury stock? O The company wants to increase its EPS O The company wants to have shares available for employee stock options. The company wants to increase stockholders' equity. O The company feels the stock is undervalued in the marketplace. 4
10. A company would repurchase its own shares for all of the following reasons except if it a.believes the shares are overvalued. b.wishes to increase the earnings per share. c.wishes to prevent unwanted takeover attempts. d.needs the shares for employee bonuses.
In applying the Sec. 318 attribution rules to a stock redemption, the stock of a corporation is only deemed to be proportionately owned by the shareholder when the shareholder owns more than 50% of the corporate stock. This statement is True, correct?
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Which statement is incorrect? a. Dilution is an increase in earnings per share when convertible instruments are converted to ordinary shares. b. Diluted EPS is required when there are potential shares outstanding. c. Dilutive potential shares shall be deemed to have been converted into shares at the start of the period or, if later, the date of the issue of the potential shares d. Options and warrants are dilutive, when they would result in the issue of shares for less than the average market price of shares during the period. e. none of the above
Week 3: Majority of stock and limitations of consolidated statements What are the advantages of acquiring the majority of the voting stock of another company rather than acquiring all of its voting stock? Remember, I am looking for accounting treatments and a comparison of the different approaches. Where is a great place to begin this search? Describe the limitations of consolidated financial statements. What problems would a reader of consolidated financial statements encounter as a result?
In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2018 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2017, UMC’s balance sheet reported the following shareholders’ equity: ($ in millions) Common stock, $1 par $ 300 Paid-in capital—excess of par 1,200 Retained earnings 1,156 Treasury stock (6.0 million shares at cost) (125 ) Total shareholders’ equity $ 2,531 Required:Identify the type of accounting change this decision represents and prepare the journal entry to effect the reclassification of treasury shares as retired shares.
When a corporation’s earnings and dividends are exemplary good, which type of preference shares will yield the highest benefit for ordinary shareholders? a. noncumulative, nonparticipating b. noncumulative, fully participating c. cumulative, nonparticipating d. cumulative, participating e. cumulative, partially participating
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.
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Please assist by providing the correct answer for 1.1,1.2 and 1.3 1.1 There are limitations on the issuing and redemption of redeemable shares. Which ONE of the following is NOT an actual limitation? Select one: a. Redeemable shares cannot be issued if the only shares that the company has issued are redeemable shares. b. Redeemable shares can only be redeemed if they are fully paid-up. c. When redeeming shares, the company must pay fully for them at the time of redemption, unless the terms of redemption provide for a later date. d. Private companies can only issue redeemable shares if authorised by their articles. 1.2 Identify the statement that is correct regarding the paid up capital. Select one: a. If any of the shareholders has not paid amount on calls, such an amount may be called as ‘calls in arrears’. Therefore, paid up capital is equal to the called-up capital plus call in arrears. b. It is that portion of the called up capital which has been actually received from the…
company value is not correct, C2 new share price and shares sold are not correct