Which of the following is NOT a characteristic of common stock?O Stock represents partial ownership in a company.O tock represents a residual claim on the firm's assets.O For tax purposes, dividends paid to stockholders are NOT income tax deductible.O Dividends are not legally required to be paid to the stockholders.O Stock cash flows are temporary, and expire just like bonds.

Common stock forms part of the capital structure of the company. It provides funds for managing…

Which of the following is NOT a characteristic of common stock? O tock represents partial ownership in a company. O tock represents a residual claim on the firm's assets. For tax purposes, dividends paid to stockholders are NOT income tax deductible. O Dividends are not legally required to be paid to the stockholders. O Stock cash flows are temporary, and expire just like bonds.

Which of the following is NOT a characteristic of common stock? O tock represents partial ownership in a company. O tock represents a residual claim on the firm's assets. For tax purposes, dividends paid to stockholders are NOT income tax deductible. O Dividends are not legally required to be paid to the stockholders. O Stock cash flows are temporary, and expire just like bonds.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 14MC: Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a...

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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.
Indicate whether the following statements are true or false. If the statementis false, explain why.a. If a firm repurchases its stock in the open market, the shareholders whotender the stock are subject to capital gains taxes.
Explain the corporate characteristic termed “no mutual agency” Explain the corporate characteristic termed limited liability. Explain the term outstanding stock. Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferred stock? Is it true or false that all forms and classes of stock carry voting rights? Is it true of false that stock sold for amounts in excess of par value results in a gain reported on the income statement?
Answer the follow: Explain the corporate characteristic termed “no mutual agency" Explain the corporate characteristic termed limited liability. Explain the term outstanding stock. Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferred stock? Is it true or false that all forms and classes of stock carry voting rights? Is it true of false that stock sold for amounts in excess of par value results in a gain reported on the income statement?
Which feature is not applicable to common stock ownership?a. Right to receive dividends before preferred stockshareholders.b. Right to vote on appointment of external auditor.c. Right to receive residual assets of the company shouldit cease operations.d. All of the above are applicable to common stockownership.
Which of the following is not a characteristic of the commonstock of a large, publicly owned corporation?a. The shares may be transferred from one investor toanother without disrupting the continuity of businessoperations.b. Voting rights in the election of the board of directors.c. A cumulative right to receive dividends. d. After issuance, the market value of the stock is unre-lated to its par value.
The following statements are true regarding dividends. Which of the following is incorrect? a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings. b) If an entity has a deficit, paying dividends is still considered legal. c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings. d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.
Which of the following statements is CORRECT? a. The preferred stock of a given firm is generally less risky to investors than the same firm's common stock. b. Corporations cannot buy the preferred stocks of other corporations. c. Preferred dividends are not generally cumulative. d. A big advantage of preferred stock is that dividends on preferred stocks are tax deductible by the issuing corporation. e. Preferred stockholders have a priority over bondholders in the event of bankruptcy to the income, but not to the proceeds in a liquidation.
Why would a company choose to not pay dividends on its common stock?
all of the following are true about the issuance of non-voting common stock except a. it has been issued when the corporation wishes to raise capital through the sale of common stock but does not want to relinquish its voting control o b. it has been issued as a defense against an unfriendly takeover c it tends to result in the dilution of voting rights of current stockholders od. it tends to result in unequal voting rights among the shareholders
Corporations with simple capital structures (only Common Stock issued) need not present Earnings per Share calculation for common stock. True or False
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.