Which statement is true regarding the new Companies Act 71 of 2008? Select one: a. Companies are no longer allowed to issue par value shares. b. Companies are now expected to be managed by shareholders. c. Companies are no longer allowed to issue capitalization shares. d. Companies are only permitted to issue redeemable Preference share

Which statement is true regarding the new Companies Act 71 of 2008? Select one: a. Companies are no longer allowed to issue par value shares. b. Companies are now expected to be managed by shareholders. c. Companies are no longer allowed to issue capitalization shares. d. Companies are only permitted to issue redeemable Preference share

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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According to a company press release, on January 5, 2012, Hansen Natural Corporation changed its name to Monster Beverage Corporation. According to Yahoo Finance, on that day the value of the company stock (symbol: MNST) was $15.64 per share. On January 5, 2018, the stock closed at $63.49 per share. This represents an increase of nearly 306%. A. Discuss the factors that might influence the increase in share price. B. Consider yourself as a potential shareholder. What factors would you consider when deciding whether or not to purchase shares in Monster Beverage Corporation today?
Which of the following statements is incorrect? Issued shares of stocks include those that have been at one time been sold to the public and which have been subsequently retired. If an entity’s capital stock is retired, the Share Capital account is reduced by its par value, the number of shares is reduced by the stock retired and the treasury stock is credited at cost. Treasury shares may be reissued as dividends, in which case the cost of the shares should be charged to Retained Earnings. Though may be used in computing for the Share Capital, stated value is not similar to par value of stock.
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.
Why would a corporation redeem its stock? a. To decrease the per-share book value of the stock held by shareholders b. To increase the per-share price of the stock on the open market c. To increase the per-share book value of the stock held by the corporation d. To decrease the per-share book value of the stock on the open market
Which of the following statements about preferred shares is inaccurate? Select one: a. Preferred shares carry credit ratings. b. In the event of liquidation of a firm’s assets, preferred shareholders are paid out before common shareholders. c. Preferred share dividends are always cumulative. d. Preferred shares are often callable and puttable. e. Preferred share dividend income from another Canadian corporation is tax-exempt.
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?
In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2018 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2017, UMC’s balance sheet reported the following shareholders’ equity: ($ in millions) Common stock, $1 par $ 300 Paid-in capital—excess of par 1,200 Retained earnings 1,156 Treasury stock (6.0 million shares at cost) (125 ) Total shareholders’ equity $ 2,531 Required:Identify the type of accounting change this decision represents and prepare the journal entry to effect the reclassification of treasury shares as retired shares.
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?
2. Identify and explain the normal types of company shares. Why are shares issued with different rights? Is the position of issuance of share under the Companies Act 2016 similar to the Companies Act 1965? (refer to Malaysia Companies Act)Minimum 1000word - no handwriting
Which of the following is a characteristic of common stock?a. The right to the residual income after creditors have been paidb. Limited liability in the case of the corporation going bankruptc. Voting rights to elect the board of directorsd. The right to maintain a proportionate share of ownership in the firm (when new shares are issued, stockholders have the first right of refusal)e. All of the above
Identify all of the following statements that are correct with regards to dividends and stock splits: a. The record date is the date that will determine who is eligible to receive a dividend. b. When a stock split occurs, a share’s market value will decline and, initially, each shareholder’s wealth will decline. c. Companies are not required to declare and issue dividends to common shareholders, but companies are required to declare and issue a dividend to preferred shareholders. d. If a person holds 25% of the common shares in a company, they will receive 25% of the total dividends paid on common shares. e. Both cash dividends and stock dividends decrease shareholders’ equity. f. The advantage of a stock split is that it may increase the marketability of the shares by lowering the share price. g. The Canada Business Corporations Act requires that stock dividends be recorded at book value. h. When a stock dividend is declared, additional shares will be issued to each shareholder based…