1. When you own a share of stock, you are one of the corporation's creditors, true...
1. When you own a share of stock, you are one of the corporation's creditors, true or false?
Homework Answers
Answer 1:
Correct answer is:
False
Explanation:
Shareholder is not one of the corporation's creditors. Shareholders provide equity and are not required to be repaid. Shareholders have a stake in the company.
Creditors do not have any %age ownership in a company. Creditors provide funds which have to be repaid with interest or they supplies goods or services which have to be paid for. The company is under contractual obligation to pay creditors as per terms of it. There is no repayment obligation to shareholders. The amounts payable to creditors are liabilities of company and the same have to be repaid. The funds provided by shareholders are equity of the company. Shareholders get dividends if and when the company earns profit.
In case of liquidation secured creditors have a preference over shareholders. In such a scenario shareholders have the last preference.
As such the statement is false.
Add Answer to:
1. When you own a share of stock, you are one of the
corporation's creditors, true...
If you own preferred stock; when a preferred stock has a redeemable option, the firm can...
If you own preferred stock; when a preferred stock has a redeemable option, the firm can recall the stock if it is in your beat interest. True or False?
1) Stock is attractive to investors because stockholders are not liable for the corporation's actions and...
1) Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred. Select one: True False 2) Cash flows are essentially the same as net income because they are both measured using accrual accounting principles. Select one: True False 3) Financial statement analysis applies analytical tools to financial statements and related data for making business decisions. Select one: True False
1. According to the basic stock valuation model, the value an investor assigns to a share of stock is dependent upo...
1. According to the basic stock valuation model, the value an investor assigns to a share of stock is dependent upon the length of time the investor plans to hold the stock. 2. True b. False Market risk refers to the tendency of a stock to move with the general stock market. A stock with above-average market risk will tend to be more volatile than an average stock, and its beta will be greater than 1.0. a. True b. False...
True or False: When reorganization plans are created, creditors prefer an extension because they expect to...
True or False: When reorganization plans are created, creditors prefer an extension because they expect to receive full payment eventually.
True or False: When reorganization plans are created, creditors prefer an extension because they expect to...
True or False: When reorganization plans are created, creditors prefer an extension because they expect to receive full payment eventually.
On January 31, 1988, when the Montana Corporation's stock 7. was selling at $36 per share,...
On January 31, 1988, when the Montana Corporation's stock 7. was selling at $36 per share, its capital accounts were as follows: Capital stock (par value $20; 100,000 shares issued) $2,000,000 Premium on Capital Stock 800,000 Retained Earnings 4,550,000 If the corporation declares a 100% stock dividend and the par value per share remains at $20, the value of the capital stock would A. remain the same B. increase to $5,600,000 C. increase to $5,000,000 D. decrease
A. Banks are not allowed to own stock. True False B. Banks are not allowed to...
A. Banks are not allowed to own stock. True False B. Banks are not allowed to own bonds. True False C. Banks are not allowed to underwrite credit default swaps. True False
You own 1,000 shares of stock in Company K. You will receive a $2.50 per share...
You own 1,000 shares of stock in Company K. You will receive a $2.50 per share dividend in one year. In two years, Company K will pay a liquidating dividend of $55 per share. The required return on its stock is 12%. a) What is the current share price of your stock (ignoring taxes)? b) If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends.
You own 1,000 shares of stock in Armstrong Corporation. You will receive a $2.70 per share...
You own 1,000 shares of stock in Armstrong Corporation. You will receive a $2.70 per share dividend in one year. In two years, Armstrong will pay a liquidating dividend of $46 per share. The required return on Armstrong stock is 15 percent. What is the current share price of your stock (ignoring taxes)? If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends.
If you own 1.200 shares (7% of a corporation's stock) and the corporation issues 12,000 new...
If you own 1.200 shares (7% of a corporation's stock) and the corporation issues 12,000 new shares, how many of the new shares can your purchase under preemptive right? O A 2,040 OB. 1,116 OC. O OD 840
1. According to the basic stock valuation model, the value an investor assigns to a share of stock is dependent upon the length of time the investor plans to hold the stock. 2. True b. False Market risk refers to the tendency of a stock to move with the general stock market. A stock with above-average market risk will tend to be more volatile than an average stock, and its beta will be greater than 1.0. a. True b. False...
You own 1,000 shares of stock in Company K. You will receive a $2.50 per share dividend in one year. In two years, Company K will pay a liquidating dividend of $55 per share. The required return on its stock is 12%. a) What is the current share price of your stock (ignoring taxes)? b) If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends.
You own 1,000 shares of stock in Armstrong Corporation. You will receive a $2.70 per share dividend in one year. In two years, Armstrong will pay a liquidating dividend of $46 per share. The required return on Armstrong stock is 15 percent. What is the current share price of your stock (ignoring taxes)? If you would rather have equal dividends in each of the next two years, show how you can accomplish this by creating homemade dividends.
If you own 1.200 shares (7% of a corporation's stock) and the corporation issues 12,000 new shares, how many of the new shares can your purchase under preemptive right? O A 2,040 OB. 1,116 OC. O OD 840
Most questions answered within 3 hours.
-
After reading the Primary Care scenario in the Allied Health
Community, what could have been implemented...
asked 40 seconds from now -
Plantinga argues for the view that there is no solution to the
problem of moral evil....
asked 1 minute ago -
For this Discussion, you examine a case study of
hearing-impaired children who developed their own language...
asked 6 minutes ago -
A solution is prepared by dissolving 11.60 g of a mixture of
sodium carbonate and sodium...
asked 3 minutes ago -
At the beginning of the year, Palermo Brothers, Inc., purchased
a new plastic water bottle making...
asked 4 minutes ago -
You could argue that even though Rockefeller clearly had
enormous market power (90% of the market)...
asked 5 minutes ago -
1. Mini Case Study: Suppose that, in the future, most jobs will
be bid upon by...
asked 6 minutes ago -
The moment of inertia of a disk rotating about its axis of
symmetry is Icm=1/2MR^2
The...
asked 13 minutes ago -
When using a relational database what makes data
formatting so important and critical to the functions...
asked 24 minutes ago -
The following temperatures show the (fictional) daily low
measured at O'Hare airport every January 1st from...
asked 44 minutes ago -
Your friend is interested in the characteristics of fast tree
planters. He searched through the records...
asked 51 minutes ago -
. 0.67 g of Ag is deposited electrolytically from
AgNO3 after a certain period of time...
asked 52 minutes ago