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- Which of the following are not part of common equity? a. preferred stock c. retained earnings b. common stock d. treasury stockIf the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par calledWhich of the following statements is false? Group of answer choices Stocks are long-term securities issued by corporations. Common stock is the residual interest in the firm and gives the owner dividend rights, voting rights, liquidation rights, and preemptive rights. Common stock promises a dividend payment but usually does not give voting rights. Bonds are less risky than stocks.
- The Standard requires every stock corporation to disclose the amount of unrestricted retained earnings equal to the cost of treasury shares, if there is any, but does not compel it to include the number of shares held in the treasury through the notes to financial statements. * a. True b. FalseWhen a corporation has outstanding both common and pre-ferred stock: a. Basic and diluted earnings per share are reported onlyif the preferred stock is cumulative.b. Earnings per share is reported for each type of stockoutstanding.c. Earnings per share is computed without regard to theamount of the annual preferred dividends.d. Earnings per share is computed without regard to theamount of dividends declared on common stock.Preferred stocks are characterized by all the following, except a. the dividends declared for the investors of these stocks are tax deductible to the issuer b. may be convertible to ordinary or common stock c. voting rights are generally not present and not given to the holders of these stocks d. warrants may be attached to these securities
- Which of the following statements(s) is (are) true regarding preferred stock? a. Preferred stock dividends are not a liability of the firm unless they are declared b. Preferred stock dividends are paid after dividends are paid to common stockholders c. Like bonds, preferred stocks have maturity d. Preferred stock does carry voting rightsWhich of the following statements is not true about preferred stock? A.The rate of dividend is usually fixed B.Stockholders' usually have a preference as to dividends C. Stockholders always have a voting right D. Stockholders' usually have a preference as to assets upon liquidation of the corporationCompanies can issue different classes of common stock. Which of the following statements concerning stock classes is correct? a. All common stock fall into one of three classes: A, B, and C. b. Most firms have several classes of common stock outstanding. c. All common stock, regardless of class, must have voting rights. d. All common stock, regardless of class, must have the same dividend privileges. e. None of the above statements is necessarily true.
- Shares of stock that have been issued by the corporation at their par or issued value of the shares, when in fact no consideration was received paid by the subscriber with the understanding that he need never pay for them, would technically be called a) “Discounted stock” b) “Premium stocks” c) “Watered stocks” d) “Bonus stocks”From pages 10-2 and 10-3 of the VLN, when a corporation goes to the stock market and buys the corporation's stock, the stock becomes treasury stock. Which of the following statement is false regarding treasury stock? Group of answer choices A. Treasury stock is still part of the issued shares but they are no longer outstanding. B. Treasury stock has no effect on the common stock account. C. Treasury stock will receive dividends when the corporation declares them. D. Treasury stock is recorded at cost.Capital stock is a major part of a corporation’s equity. The term capital stock embraces both com- mon and preferred stock. Required: Identifythebasicrightsinherentinownershipofcommonstockandexplainhowownersexercisethem. Describe preferred stock. Discuss various preferences often afforded preferred stock. In the analysis and interpretation of equity securities of a corporation, it is important to understand certain terminology. Define and describe the following equity items:(1) Treasurystock (2) Stockright (3) Stockwarrant