stock splits are similar to stock dividends in that both reduce retained earnings and have no effect on par true false
Q: A stock splita. has no effect on total stockholders’ equity.b. increases assets and stockholders’…
A: Answer: Option a
Q: Which of the following is not a very common feature of preferred stock? a. Voting rights b.The…
A: One of the sources of raising the funds and meeting the financial requirements is to issue the…
Q: According to the Signaling Theory, issuance of common stock is a negative sign. Do you agree or…
A: Firm issues different securities to arrange the funds to meet the financial requirements. Debt and…
Q: A small stock dividend a. decreases common stock. b. has no effect on total equity. c. increases…
A: Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in…
Q: When treasury stock is purchased for more par value of the stock and the cost method is used to…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: sed on the Signaling Theory, issuance of common stock is a negative sign.
A: Introduction : In simple words, the signalling theory states that the actions made by the company…
Q: When treasury stock is sold below cost, the Paid-in Capital, Treasury Stock account is debited for…
A: Treasury stock refers to previously issued stock that the issuing business buys back from…
Q: Discuss why options and warrants may be considered potentially dilutive common shares for the…
A:
Q: When stock dividends are distributed stock dividends distributable is decreased. retained earnings…
A: Financial Management: Financial management comprises of two words i.e. Finance and management.…
Q: s it true of false that stock sold for amounts in excess of par value results in a gain reported on…
A: A company issues its common stock at par value or at an amount more than the par value. The amount…
Q: If stock dividends and stock splits don't give shareholders significant value/ amount, why do you…
A: Every publicly listed company has a defined amount of existing shares. A stock split is a measure…
Q: hen treasury stock is sold for less than its cost, the entry should include a debit toa. Gain on…
A: When treasury stock is sold for less than its cost, then amount of cash received is debited, cost of…
Q: Discuss why stock dividend and stock split are not real dividend issues.
A: A dividend is a circulation of benefits by an organization to its investors. At the point when a…
Q: the effect of Treasury shares are resold at more than cost on total equity is No Effect Can't be…
A: The treasury shares are the shares that have been reacquired by the issuing firm from the…
Q: Why is preferred stock referred to as a hybrid security? It is often said to combine the worst…
A: Several times preferred stock is attributed to hybrid security as it has various features of both…
Q: The cost of equity is easier to estimate than the cost of either debt or preferred stock. True…
A: WACC- Weighted average cost of capital (WACC) is the rate that a company is expected to pay on…
Q: How would the declaration and subsequent issuance of a small stock dividend affect share capital and…
A: Small stock dividend means the issue of shares less than 25% of the total outstanding shares in the…
Q: How does a 2: 1 stock split (stock-split-up) affect the following two items? Par Value per Share…
A: stock split is a decision by a company's board of directors to increase the number of shares that…
Q: What happens to the price of a stock when the stock goes “ex-dividend”? a) it decreases…
A: Ex dividend date is the cut off date to purchase a stock. Investor who purchased stock on ex…
Q: On the average, the announcement of a decrease in dividends can be interpreted by investors as bad…
A: A financial manager has to take three types of decisions for the company. They are investing…
Q: The Dividend-Discount Model (DDM) can only be used to value stocks that are currently paying…
A: Answer: The answer is TRUE.
Q: When a share split occurs, the aggregate par value of issued shares will change. * True O False
A: Share split means to divide the shares and increase them in numbers and alternatively adjusting the…
Q: A reduction of par or stated value of stock results from a Group of answer choices liquidating…
A: The dividend is the return to the shareholders for making an investment in the company. It is…
Q: Which of the following statements is false? Multiple Choice Both stock splits and stock dividends…
A: The appropriate answer is (C). Reallocation of amounts between the retained earnings and contributed…
Q: What effect does the issuance of a 2-for-1 stock split have on each of the following? Par Value per…
A: Stock split does not gives any additional funding to the organization. It will increase number…
Q: Why is this statement false. Small stock dividends are accounted for at the stock's par value.
A: This statement is false because: "A small stock dividend are accounted for at market price on the…
Q: Which of the following statements is false? a. the common stock account has a credit balance. b. the…
A:
Q: The valuation of common stock is more complicated than the valuation of either bonds or preferred…
A: Value of Equity = Dividends expected / (Required Return - Growth Rate) Value of preferred stock =…
Q: In a stock split, zero basis is allocated to the new shares. True or False
A: A stock split means dividing the stock of the company. It reduces the market price of individual…
Q: Which of the following statements concerning common stock and the investment banking process is NOT…
A: Common stock is the ordinary shares issued by the company. It is presented in the balance sheet…
Q: Dividends in arrears pertain to non-cumulative preferred stock. True or False
A: Non-cumulative Preferred Stock are those on which dividend is not accumulated and carry forward. So…
Q: Stock dividends are ________ costly to issue than cash dividends. What is the missing word?
A: Cash dividend is exposing company to double taxation. The cash dividend is taxable in the hands of…
Q: True or False, pls explain why 2) Stock splits create more economic value than stock dividends
A: Answer: Stock spilt is condition where company cause division of shares into multiple numbers. Stock…
Q: which of the below statement are true? I.Dividends of common stock are expected to grow at an…
A: Explanation As we know, the price of the share and the dividend received from it is not certain. It…
Q: The loss from short selling a stock that rises in price is limited to the initial price of the stock…
A: The trading activity in secondary market where trader is allowed to sell a stock without owning that…
Q: Which one of the following methods is not derived from the principle that the value of a stock is…
A: The valuation methods can be divided into discounted cash flows method and the comparables method.
Q: If a preferred stock is of the cumulative type, a. dividends cannot be passed if they are earned.…
A: Preferred stock carry fixed rate of dividends that must be paid each year.
Q: The purchase of treasury stock decreases common stock outstanding Select one: True False
A: Treasury stock is the stock that has been issued by the entity previously but the same is now…
Q: True or False: When stock is issued for more than its par value, the excess is considered to be an…
A: Additional paid-in-capital can be defined as the extra amount received from the investor for an…
Q: When preference share is cumulative, preferred dividends not declared in a period are a. called…
A: Solution: When preference share is cumulative, preferred dividends not declared in a period are…
Q: The text identifies three methods for estimating the cost of common stock from reinvested earnings…
A: The text identifies three methods for estimating the cost of common stock from reinvested earnings…
Q: In what situations should managers consider the use of stock splits?
A: stock splits: It is the situation of increasing the number of shares by dividing one share into tow…
Q: circumstance the Dividend Discount Model (DDM) cannot be used to determine the price of a stock
A: Dividend discount model It is generally utilized by investors for the measurement of the value of…
Q: why is this statement false? Small and large stock dividends have no effect on the Common Stock…
A:
Q: What is stock split? Distinguish between a bonus issue and a stock split.
A: Stock Split Means: it refers to that a company divides its existing share into multiple shares or a…
stock splits are similar to stock dividends in that both reduce retained earnings and have no effect on par
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- Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.Discuss why stock dividend and stock split are not real dividend issues.A stock split will cause a change in which of the following items? Cash Common stock The number of outstanding shares None of the above
- The primary purpose of a stock split is to a. reduce the market price of the stock per share. b. increase paid-in capital. c. increase retained earnings. d. increase the market price of the stock per share.If a preferred stock is of the cumulative type, a. dividends cannot be passed if they are earned. b. unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common stockholders. c. dividends must be paid, and if not a liability is created. d.dividends must be paid on an equal basis with common stock, so long as earnings permit.Which of the following statements about stock dividends is not true? Stock dividend is the only type of dividend that does not reduce stockholders’ equity. Stock dividend is the only type of dividend that does not reduce retained earnings. Stock dividend does not affect par value per share. Stock dividend may or may not affect paid-in capital in excess of par.
- Stock dividends are ________ costly to issue than cash dividends. What is the missing word?Which of the following is the reason that preferred dividends declared during the period are deducted from net income in calculating return on common stockholders’ equity? a. Preferred dividends are not paid from net income. b. Preferred dividends are not a part of stockholders’ equity. c. Preferred dividends are not paid until all common stockholders have received their dividends, so preferred dividends are not relevant in the formula and so must be taken out of the equation. d. Preferred dividends will reduce the amount of income available for distribution to common stockholders.Which of the following statements is false regarding treasury shares? [A] purchasing treasury shares would decreasethe total shareholders’ equity [B] the resulting gain in selling treasury shares is presented as share premium fromtreasury shares [C] treasury shares will not receive cash dividends [D] the retirement of treasury shares will decreasethe total shareholders’ equity.
- What is the difference between a stock split and a stock split effected in the form of a stock dividend? Finally, what is a reverse stock split, and why would a company have one?a) Distinguish the differences between stock splits and stock dividends.The residual theory of dividends argues that dividends a. can only be distributed if there is income remained after funding all prospective investment b. not relevant unless there is an excess demand for cash dividends c. are irrelevant in any dividend distribution plan d. are necessary and important to maintain the market price of any ordinary shares