Question 15? Which of the following statements is (are) true regarding preferred stocks?If a company does not have enough cash to pay dividends to preferred stock holders,they cannot pay dividends to common stock holders.If a company does not have enough cash to pay dividends to preferred stock holders,they cannot pay interests to its bondholders.Preferred stocks are the same as common stocks.Preferred stock holders can vote to decide on major corporate eventsSEP19

Shares are units which are issued in the market to raise finances. These are of two kinds; Common…

Answered: Which of the following statements is…

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 2MCQ: Which of the following statements is true? The outstanding number of shares is the maximum number of...

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Similar questions

What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declare a 100% stock dividend or a 2-for-1 split? Assume that either action is feasible.
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.
Which of the following statements(s) is (are) false regarding preferred stock? a. Preferred stock does not carry voting rights b. Like bonds, preferred stocks have maturity c. Preferred stock dividends are not a liability of the firm unless they are declared d. Preferred stock dividends must be paid before dividends can be paid to common stockholders
In what way is a preferred stock usually more similar to a bond than to a common stock? O a. Preferred stockholders are more risky than common stocks O b. Preferred stockholders elect the board of directors of the organization O c. Preferred bondholders participate in the growth of the company through increases in dividends and stock prices O d. Preferred stockholders are typical entitled fixed payments O e. If the company were to go into liquidation, preferred stockholders will be entitled to payments after common stockholders are paid-off
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 rights
Which of the following is FALSE regarding features of common stock? Dividends are paid from a company's after-tax earnings Common stockholders are the residual claimants, meaning that if the company is liquidated the common stockholders are last in line to get any payment. Some companies have two classes of stock, with the company's founders holding shares that get 10 votes per share and the investing public holding shares that get 1 vote per share common stock pays a fixed dividend that continues indefinitely common stockholders elect the board of directors.
Which of the following is not a typical question that must be answered with regard to a private company that is owned by a large number of shareholders? Question 46 options: How and when does the company get money from the sale of its stock? What rate of return does the company promise to pay when it sells stock? What is the dividend yield on preferred shares of companies that hold this stock? Who makes decisions in a company owned by a large number of shareholders?
Answer the following: 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 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 corporation
As discussed in the chapter, preferred stock offers an investor certain preferences over common stock in relation to dividends and liquidation value. In theory, these preferences should make preferred shares more attractive to potential investors than common stock. In practice, however, a majority of companies do not issue preferred stock, and most investors seem to favor putting their investment dollars into common shares. Discuss some of the reasons a company might not issue preferred stock, and why most investors choose common over preferred.
Companies 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.
Companies can issue different classes of common stock. Which of the following statements concerning stock classes is CORRECT? a. All common stock, regardless of class, must pay the same dividend. b. All firms have several classes of common stock. c. Some class or classes of common stock are entitled to more votes per share than other classes. d. All common stocks fall into one of three classes: A, B, and C. e. All common stocks, regardless of class, must have the same voting rights.

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