What are the advantages of using restricted stock to compensateemployees?

Q: Why is the return associated with common stock referred to as a residual claim? Contrast this kind…

A: Common stock holders are the owners of the business. Profits earned by the company will be the…

Q: Does the component cost of preferred stock include or excludeflotation costs? Explain

A: Preferred Stock: The stock that has no right over the decision making of the company against which…

Q: What is Restricted Stock Plans?

A:

Q: The preemptive right allows common stockholders to:

A: The Preemptive right allows common stockholders to :  maintain a proportionate share of ownership in…

Q: When can shares be Forfeited?

A: Shares are issued by the company to the public for ownership in the company The shares have an…

Q: Describe howcompensation expense is determined and recorded for a restricted stock award plan

A:

Q: In theory, only systematic risk matters for the required return of a stock. Why does non-systematic…

A: Systematic risk refers to those which impacts the whole market rather than on particular stock…

Q: What is the primary motivation for a forward stock split?

A: Here is the Answer

Q: How is it possible for an employee stock option to be valuable even if the firm’s stock price fails…

A: Employee stock option is an instrument granted to the employees of the company (mostly to the…

Q: The buyer of a Put Option has the right but not the obligation to sell the underlying stock. True…

A: A put option is a derivative contract giving the purchaser/owner the right, but not the obligation,…

Q: How can an investor benefit from ane equity investment that does not pay dividends?

A: In layman’s words, financial management is the management of the finance or funds in an…

Q: What is different between residual dividend, dividend policy and share repurchase ?

A: To arrange the funds for the business operations, firms issue various securities and pay return on…

Q: In what situation should a firm split its stock?

A: Firms generally split the stock when the price of the share becomes too high or exceeds the level…

Q: When an acquirer chooses between cash offer or stock offer, which of the followings is the least…

A: Acquisition refers to obtaining the other company wholly or partially by paying the cash…

Q: Common stock has voting rights; preferred stock usually does not have voting rights. True False

A: Meaning of Common Stock :-  Common stock refers to share of ownership in a corporation. When people…

Q: Why is noncumulative preferred stock often considered anunattractive form of investment?

A: The expression "noncumulative" depicts a kind of preferred stock that doesn't pay investors any…

Q: It is the board that decides whether a dividend is to be paid or not select an option False True

A: Dividends are payments provided to a corporation’s shareholders when the company makes a profit.…

Q: Write down what are the disadvantages of shareholders equity?

A: Equity is one of the common sources to raise finance. Whenever a company requires finance it can…

Q: What are the steps involved in valuation of supernormal growth stock?

A: Supernormal growth stock is a stock which experiences a robust growth at initial levels and later…

Q: In your opinion, what is the most compelling justification for a forward stock split?

A: This question explains about the most compelling justification for a forward stock split

Q: Explain the difference between the Stable Dividend Policy and the Residual Dividend Policy?

A: A company's dividend distribution policy determines the number of dividends and the frequency with…

Q: What is the fair value option? Where do companies thatelect the fair value option report unrealized…

A:

Q: Compensation expense must be adjusted during the service period to reflect changes in the fair value…

A: Compensation costs are the costs that an employer must repay to an employee as a benefit when the…

Q: which of the following is not a recognised approach to determine the cost of equity options :…

A: Source of raising capital include: Issue of Shares Issue of Debt instruments Term Loans Public…

Q: Stock appreciation right would normally be settled through

A: Second option is wrong because stock appreciation right is not settled through issue of share…

Q: If a stock’s market value exceeds its book value, then the stock is overpriced. Do you agree?…

A: Market value depends on a lot of factors such as 1. Potential future earnings 2. Non Tangibles which…

Q: When does reverse stock split occurs?

A: Stock split means reducing the face value of single share. For example, A share of $100 will be…

Q: According to the signaling theory, issuing common stock is negatively perceived. Is this true or…

A: Signaling theory focuses on how issue of debt and equity are perceived by the investors and how…

Q: Define Restricted Stock Awards.

A:

Q: Differentiate the following investments by determining its advantage or disadvantage Preferred…

A: Preferred stock  Preferred stock is preference shares issued by the company which has the…

Q: What is restricted stock?

A: Definition: Common stock: Common stock is the instrument used by the company for raising funds from…

Q: Current GAAP recommends that the fair value method be used to account for compensatory stock option…

A: The answer for the theory question on the Fair value method to account for the Compensatory stock…

Q: What is the fair value option? Where do companies that elect the fair value option report unrealized…

A:

Q: Under which of the following market the shares once purchase cannot be sold again:

A: Explanation : The New issue market is the financial market where new shares are sold for the first…

Q: How is it possible for an employee stock option to be valuable even if the firm’s stock price fails…

A: employee stock options is a type of equity compensation to their employees like options and…

Q: How are share repurchases an alternative to dividends, and why might investors prefer them

A: The share repurchase is the alternative to dividends because when a company repurchases it’s issued…

Q: The pre-emptive right of a common stockholder is the right to?

A: Preemptive Right Preemptive Right are defined as the rights which are giving only to the early…

Q: Who are the major purchasers of nonconvertible preferred stock? Why?

A: Mostly, the buyers of preferred stocks are institutional investors because they get an incentive…