Homework Answers
Solution 18:
Economic effect of issuing 2 for 1 stock split is "Decrease par value per share; and no effect on retained earnings"
Hence 2nd option is correct.
Solution 19:
If a corporation uses retention of earnings to finance the purchase of property instead of issuing equity securities then "Leverage is being used"
Hence 3rd option is correct.
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Which one of the following represents the economic effects of issuing a 2-for-1 stock split? No...
Indicate the principal effects of a stock dividend versus a stock split on the issuing corporation....
Indicate the principal effects of a stock dividend versus a stock split on the issuing corporation. Respond in the spaces as follows: "C" for change; "NC" for no change. Stock Dividend_ Stock Split Number of Shares Outstanding Par Value per Share Total Par Outstanding Retained Earnings Total Stockholders' Equity Composition of Stockholders' Equity
Stock split versus stock dividend—Firm Mammoth Corporation is considering a? 3-for-2 stock split. It currently has...
Stock split versus stock
dividend—Firm
Mammoth Corporation is considering a? 3-for-2 stock split. It
currently has the? stockholders' equity position shown. The current
stock price is? $120 per share. The most recent? period's earnings
available for common stock is included in retained earnings.
a. What effect on? Mammoth's equity account
would result from the stock split?
b. What change in stock price would you expect
to result from the stock? split?
c. What is the maximum cash dividend per share...
Which one of the following is correct concerning the effects of a reverse stock split? Select...
Which one of the following is correct concerning the effects of a reverse stock split? Select one: O a. The market price of the stock will decrease. b. The number of shares outstanding will increase. O c. The market value of the equity will remain constant. O d. The par value of the stock will increase. e. The balance in the common stock account will increase.
28. On May 1, 2010, ROK Corporation had 400,000 shares of $30 par value common stock outstanding,...
28. On May 1, 2010, ROK Corporation had 400,000 shares of $30 par value common stock outstanding, with a market value of $90 per share. On May 2, 2010, ROK announced a 3-for-1 stock split. After the split, what was the par value of the stock? a. $10 b. $20 c. $30 d. $90 29. Which of the following statements is TRUE? a. Stock Splits decrease total stockholders' equity b. Cash Dividends decrease total Stockholders' Equity c. Stock Dividends decrease total Stockholders' Equity d. All of...
Long-term debt offers advantages and disadvantages to the issuing firm and to the investor in debt...
Long-term debt offers advantages and disadvantages to the issuing firm and to the investor in debt securities. Examine the following two statements and indicate whether each represents an advantage or a disadvantage to the or the investor issuer By being classed as creditors, debtholders Debt securities can increase the issuer's have priority in cash flows and assets as earnings per share, everything else remaining constant compared with shareholders. Does the preceding statement indicate an Does the preceding statement indicate an...
Stock dividend versus stock split Firm The board of Wicker Home Health Care, Inc., is exploring...
Stock dividend versus stock split Firm The board of Wicker Home Health Care, Inc., is exploring ways to expand the number of shares outstanding in an effort to reduce the market price per share to a level that the firm considers more appealing to investors. The options under consideration are a 20% stock dividend and, alternatively, a 5-for-4 stock split. At the present time, the firm's equity account and other per-share information are given as follows: a. Show the effect...
ACT202: Chapter 13 Home Work Exercises Exercise 13-5: Large Stock Dividend and Stock Split: GIVEN: On...
ACT202: Chapter 13 Home Work Exercises Exercise 13-5: Large Stock Dividend and Stock Split: GIVEN: On June 30, 2017, Sharper Corporation's common stock is priced at $30.50 per share before any stock dividend or split, and the stockholders' equity section of its BS appears as follows: Common stock - $6 par value, 90,000 shares authorized, 36,000 shares issued and outstanding Paid-in capital in excess of par value, Common Stock Retained earnings Total Stockholders' Equity $ $ $ $ 216,000 100,000...
21. Which of the following is not a true statement regarding stock options? a. They may...
21. Which of the following is not a true statement regarding stock options? a. They may cause dilution of earnings per share b. The exercise of stock options could result in either gains or losses c. They involve a compensation expense d. Exercise improves the short-term liquidity and debt position of the issuing firm e. They generally allow the purchase of common stock at favorable terms 22. The pricelearnings ratio: a measures the past earning ability of the firm. b....
Exercise 11-5 Stock dividends and splits LO P2 On June 30, 2017, Sharper Corporation's common stock...
Exercise 11-5 Stock dividends and splits LO P2 On June 30, 2017, Sharper Corporation's common stock is priced at $29.50 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows. Common stock-$6 par value, 60,000 shares authorized 24,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 144,000 100,000 244,000 $ 488.000 1. Assume that the company declares and immediately...
The company with the common equity accounts shown here has decided on a two-for-one stock split....
The company with the common equity accounts shown here has decided on a two-for-one stock split. The firm’s 34-cent-per-share cash dividend on the new (postsplit) shares represents an increase of 10 percent over last year’s dividend on the presplit stock. Common stock ($1 par value) $ 500,000 Capital surplus 1,558,000 Retained earnings 3,884,000 Total owners’ equity $ 5,942,000 a. What is the new par value of the stock? (Do not round intermediate calculations and round your answer to 2 decimal...
Indicate the principal effects of a stock dividend versus a stock split on the issuing corporation. Respond in the spaces as follows: "C" for change; "NC" for no change. Stock Dividend_ Stock Split Number of Shares Outstanding Par Value per Share Total Par Outstanding Retained Earnings Total Stockholders' Equity Composition of Stockholders' Equity
Stock split versus stock
dividend—Firm
Mammoth Corporation is considering a? 3-for-2 stock split. It
currently has the? stockholders' equity position shown. The current
stock price is? $120 per share. The most recent? period's earnings
available for common stock is included in retained earnings.
a. What effect on? Mammoth's equity account
would result from the stock split?
b. What change in stock price would you expect
to result from the stock? split?
c. What is the maximum cash dividend per share...
Which one of the following is correct concerning the effects of a reverse stock split? Select one: O a. The market price of the stock will decrease. b. The number of shares outstanding will increase. O c. The market value of the equity will remain constant. O d. The par value of the stock will increase. e. The balance in the common stock account will increase.
Long-term debt offers advantages and disadvantages to the issuing firm and to the investor in debt securities. Examine the following two statements and indicate whether each represents an advantage or a disadvantage to the or the investor issuer By being classed as creditors, debtholders Debt securities can increase the issuer's have priority in cash flows and assets as earnings per share, everything else remaining constant compared with shareholders. Does the preceding statement indicate an Does the preceding statement indicate an...
Stock dividend versus stock split Firm The board of Wicker Home Health Care, Inc., is exploring ways to expand the number of shares outstanding in an effort to reduce the market price per share to a level that the firm considers more appealing to investors. The options under consideration are a 20% stock dividend and, alternatively, a 5-for-4 stock split. At the present time, the firm's equity account and other per-share information are given as follows: a. Show the effect...
ACT202: Chapter 13 Home Work Exercises Exercise 13-5: Large Stock Dividend and Stock Split: GIVEN: On June 30, 2017, Sharper Corporation's common stock is priced at $30.50 per share before any stock dividend or split, and the stockholders' equity section of its BS appears as follows: Common stock - $6 par value, 90,000 shares authorized, 36,000 shares issued and outstanding Paid-in capital in excess of par value, Common Stock Retained earnings Total Stockholders' Equity $ $ $ $ 216,000 100,000...
21. Which of the following is not a true statement regarding stock options? a. They may cause dilution of earnings per share b. The exercise of stock options could result in either gains or losses c. They involve a compensation expense d. Exercise improves the short-term liquidity and debt position of the issuing firm e. They generally allow the purchase of common stock at favorable terms 22. The pricelearnings ratio: a measures the past earning ability of the firm. b....
Exercise 11-5 Stock dividends and splits LO P2 On June 30, 2017, Sharper Corporation's common stock is priced at $29.50 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows. Common stock-$6 par value, 60,000 shares authorized 24,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 144,000 100,000 244,000 $ 488.000 1. Assume that the company declares and immediately...
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