Which of the following results in increasing basic earnings per share? Select one: a. Paying more than carrying value to retire outstanding bonds. b. Issuing cumulative preferred stock. c. Repurchase of common shares. d. Issuing a 2:1 stock split. e. All of these increase basic earnings per shar

Which of the following results in increasing basic earnings per share? Select one: a. Paying more than carrying value to retire outstanding bonds. b. Issuing cumulative preferred stock. c. Repurchase of common shares. d. Issuing a 2:1 stock split. e. All of these increase basic earnings per shar

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 12MCQ

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Question

Which of the following results in increasing basic earnings per share?

Select one:

Paying more than carrying value to retire outstanding bonds.

Issuing cumulative preferred stock.

Repurchase of common shares.

Issuing a 2:1 stock split.

All of these increase basic earnings per share.

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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