Homework Answers
Answer : b. Common Stock
=> Common Stock are being paid on the basis of earnings of the company and do not get a fixed dividend. After making all the committed or fixed claim against the net income, if any thing left will considered to pay any dividend to the common stock. Therefore, it is referred as Residual ownership.
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18. is (are) referred to as a residual form of ownership in a corporation a. Preferred...
Common shares: a. Allow shareholders to bind the corporation to contracts because they share in ownership....
Common shares: a. Allow shareholders to bind the corporation to contracts because they share in ownership. b. Represent residual equity in a corporation. c. Make shareholders liable for acts of the corporation because they share in ownership. d. Are usually redeemable. e. Always represent total contributed capital.
1. What is a stock? A. An IOU of a corporation. B. A piece of ownership...
1. What is a stock? A. An IOU of a corporation. B. A piece of ownership in a corporation. C. Total ownership of a corporation. D. A retirement investment. E. None of the above. 2. When you purchase a stock for $10.00 and then sell it one month later at $20.00 you are · A. Buying low and selling high · · B. Buying high and selling low · · C. Short selling low and short covering high · ·...
The Nolan Corporation finds that it is necessary to determine its marginal cost of capital. Nolan’s...
The Nolan Corporation finds that it is necessary to determine its marginal cost of capital. Nolan’s current capital structure calls for 45 percent debt, 15 percent preferred stock, and 40 percent common equity. Initially common equity will be in the form of retained earnings (Ke) and then new common stock (Kn). The costs of the various sources of financing are as follows: debt, 5.6 percent; preferred stock, 9 percent; retained earning, 12 percent; and new common stock, 13.2 percent.a. What...
QUESTION 1 An important disadvantage of the corporate form of ownership is double taxation. True False...
QUESTION 1 An important disadvantage of the corporate form of ownership is double taxation. True False 1 points QUESTION 2 The liability of stockholders is normally limited to their investment in the corporation. True False 1 points QUESTION 3 Authorized shares of common stock require a journal entry to record the information. True False 1 points QUESTION 4 The par value of common stock is usually different from the market value of stock. True False 1 points...
3. Each of the following is a form of ownership of an organization except a. Manufacturing...
3. Each of the following is a form of ownership of an organization except a. Manufacturing b. C-Corporation c. S-Corporation d. Partnership e. Sole Proprietrorship 34. A stock dividend can be declared or issued: only if there is sufficient cash. done so that cash is kept internally a. b. 35. The statement of cash flows is: a. a required general purpose report b. an optional financial statement c. a supplement to the balance sheet 36. The declaration and issuance of...
33. Each of the following is a form of ownership of an organization except a. Manufacturing...
33. Each of the following is a form of ownership of an organization except a. Manufacturing b. C-Corporation c. S-Corporation d. Partnership e, Sole Proprietrorship 34. A stock dividend can be declared or issued a. only if there is sufficient cash. b done so that cash is kept internally 35. The statement of cash flows is: a. a required general purpose report b an optional financial statement c. a supplement to the balance sheet 36. The declaration and issuance of...
Villanueva Corp. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000...
Villanueva Corp. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 5% convertible bonds outstanding during 2020. The preferred stock is convertible into 40,000 shares of common stock. During 2020, Villanueva paid dividends of $1.20 per share on the common stock and $4 per share on the preferred stock. The bonds were originally issued at par and each $1,000 bond is convertible into 45 shares of common stock. Villanueva’s net income for 2020 was...
12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend...
12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar...
Dividend yield is most often computed for common stock a. because the preferred stock market price...
Dividend yield is most often computed for common stock a. because the preferred stock market price per share is always lower than common stock, causing an inflated dividend yield. b. because common stock dividends are always lower than preferred stock dividends and present the most conservative estimates of dividend yield. c. because the cash dividends paid on common stock normally vary with the profitability of the corporation. d. because the preferred stock dividends vary with the profitability of the corporation....
18. What is the preferred dividend per share? a $100 C. $10 b. 10% d. $500,000...
18. What is the preferred dividend per share? a $100 C. $10 b. 10% d. $500,000 19. Ir Pepper Corporation cannot pay dividends, does it still owe the dividends to its preferred stockholders? a. Yes b. No 20. What are the most Preferred shares that Pepper Corporation can issue? a. 2,000,000 c. 500,000 b. 5,000 d. 25,000 C. d. Use the following choices to answer questions 21-25 Paid-in-Capital Account b. Current Liability Subtracted in the Stockholders' Equity Statement Cumulative Add...
3. Each of the following is a form of ownership of an organization except a. Manufacturing b. C-Corporation c. S-Corporation d. Partnership e. Sole Proprietrorship 34. A stock dividend can be declared or issued: only if there is sufficient cash. done so that cash is kept internally a. b. 35. The statement of cash flows is: a. a required general purpose report b. an optional financial statement c. a supplement to the balance sheet 36. The declaration and issuance of...
33. Each of the following is a form of ownership of an organization except a. Manufacturing b. C-Corporation c. S-Corporation d. Partnership e, Sole Proprietrorship 34. A stock dividend can be declared or issued a. only if there is sufficient cash. b done so that cash is kept internally 35. The statement of cash flows is: a. a required general purpose report b an optional financial statement c. a supplement to the balance sheet 36. The declaration and issuance of...
12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar...
Dividend yield is most often computed for common stock a. because the preferred stock market price per share is always lower than common stock, causing an inflated dividend yield. b. because common stock dividends are always lower than preferred stock dividends and present the most conservative estimates of dividend yield. c. because the cash dividends paid on common stock normally vary with the profitability of the corporation. d. because the preferred stock dividends vary with the profitability of the corporation....
18. What is the preferred dividend per share? a $100 C. $10 b. 10% d. $500,000 19. Ir Pepper Corporation cannot pay dividends, does it still owe the dividends to its preferred stockholders? a. Yes b. No 20. What are the most Preferred shares that Pepper Corporation can issue? a. 2,000,000 c. 500,000 b. 5,000 d. 25,000 C. d. Use the following choices to answer questions 21-25 Paid-in-Capital Account b. Current Liability Subtracted in the Stockholders' Equity Statement Cumulative Add...
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