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- ABC Co. has outstanding ordinary shares and nonparticipating, non-cumulative preferred shares. The liquidation value of the preferred shares is equal to its par value. The book value per ordinary share is unaffected by: the declaration of a share dividend on preferred payable in preferred shares when the market price of the preferred is equal to its par value. the declaration of a share dividend on ordinary shares payable in ordinary shares when the market price of the ordinary is equal to its par value. the payment of a previously declared cash dividend on the ordinary share. a 2-for-1 split of the ordinary shareSoar Corporation issued a 100% share dividend of its ordinary shares which had a par value of P10 before and after the dividend. At what amount should retained earnings be capitalized for the additional shares issued? a. Fair value on the declaration date b. Fair value on the payment date c. There should be no capitalization of retained earnings. d. Par valueABC Co. has outstanding ordinary shares and nonparticipating, non-cumulative preferred shares. The liquidation value of the preferred shares is equal to its par value. The book value per ordinary share is unaffected by: A. the declaration of a share dividend on preferred payable in preferred shares when the market price of the preferred is equal to its par value.B. the declaration of a share dividend on ordinary shares payable in ordinary shares when the market price of the ordinary is equal to its par value.C. the payment of a previously declared cash dividend on the ordinary share.D. a 2-for-1 split of the ordinary share
- Based on the presumption in IAS 27, the cost method is applied for equity securities when the percentage of ownership of another company is: Select one: A. 20% to 50%. B. Exactly 100%. C. Less than 20%. D. Over 50%.DEF Corporation currently have Ordinary Share Capital, P 20 par, 50,000 shares and replace it by issuing no-par share capital with a stated value of P 20. DEF also have balance of Ordinary Share Premium of P 250,000 and Retained Earnings of P 500,000. How much is the balance of the Ordinary Share Capital after the replacement?Walter Corporation has three classes of shares: Series A, Series B, and Class A. How should Walter classify and present the different classes if the characteristics of each class are as follows? Series A shares The shares are mandatorily redeemable and carry a dividend rate of 4%. Series B shares The shares are cumulative, non-voting, and carry a dividend rate of $2 per share. They are subordinated to the Series A shares for dividend distribution. Class A shares The shares are subordinated to both Series A and Series B shares for dividend distribution and participate in the earnings and losses of the company above a non-cumulative dividend of $0.50 per share. The shares have a voting right of one vote per share.
- If the preference shares are cumulative and fully participating, how much is the dividends to be allocated to ordinary shareholders? 2.If the preference shares of OTSO CORP are cumulative and participating only up to 15%, how much is the dividends to be allocated to ordinary shareholders?Which statement is incorrect regarding equity-settled share-based payment transactions? A. the issuance of shares to employees with say, a two year vesting period is considered to relate to services over the vesting period. B. the issuance of shares or rights to shares requires an increase in a component of equity C. the fair value of a share-based payment transaction is determined at the date of exercise. D. the issuance of fully vested shares, or rights to shares, is presumed to relate to past service, requiring the full amount of the grant-date fair value to be expensed immediately. Provided the specified vesting conditions, if any, are met, share-based payment arrangement is an agreement between the entity and another party that entities the other party to receive A. equity instruments of the entity or another group entity B. none of the choices C. receives goods or services from the supplier of those goods or services in a…Howe Corporation plans to issue 7,400 shares of its $1 par value common stock for $34 per share and 800 shares of its $30 par value preferred stock for $33 per share. What would Howe’s legal capital be? What would be the amount of capital received in excess of the par value of common and preferred stock? Why is a distinction made between legal capital and total capital?
- A company issued rights to its existing shareholders to purchase for par unissued shares of common stock with a par value of 10 per share. When the market value of the common stock was 12 per share, the rights were exercised. Common stock should be credited at 10 per share and a. Paid-in capital from stock rights credited at 2 per share b. Additional paid-in capital credited at 2 per share c. Retained earnings credited at 2 per share d. No credit made to additional paid-in capital or retained earningsWixi Co. has the following equity investments in FSN, DELL, and ATI. (1) Which of these companies are subsidiaries of Wixi? (2) How are individual assets and liabilities of a parent and its subsidiary(ies) reported on a balance sheet? FSN stock: Wixi owns 70% of the voting common stock and has controlling influence. DELL stock: Wixi owns 5% of the voting common stock and has insignificant influence. ATI stock: Wixi owns 30% of the voting common stock and has significant influence.Given that firms can issue multiple share classes of common stock, which of the following is INCORRECT? Select one: a. The cash flow rights of each share class must be identical. b. All of the share classes must be publicly traded. c. Each share class can only elect directors for their share class. d. Firms cannot restrict the ownership of share classes. e. All of the above answers are incorrect about dual class firms. The LMN Corporation had Net Operating Working Capital in 2019 of $1,200 and $1,400 in 2020. LMN has EBIT of $3,000, Depreciation and Amortization of $450, and Capital Expenditures of $600. If LMN has a corporate tax rate of 21%, what is the free cash flow for the firm? Select one: a. Less than $500 b. Between $500 and $650 c. Between $650 and $800 d. Between $800 and $950 e. Greater than $950 The RQP corporation is looking to reduce their cost of capital. In calculating the return on equity for the firm, the firm uses CAPM. Which of the following events would…
