. With regard to preferred shares, a.their issuance provides no flexibility to the issuing company because their terms always require mandatory dividend payments. b.their shareholders may have the right to participate, along with common shareholders, if a dividend is declared. c.no dividends are expected by the shareholders. d.there is a legal requirement for a corporation to declare a dividend on preferred shares.

. With regard to preferred shares, a.their issuance provides no flexibility to the issuing company because their terms always require mandatory dividend payments. b.their shareholders may have the right to participate, along with common shareholders, if a dividend is declared. c.no dividends are expected by the shareholders. d.there is a legal requirement for a corporation to declare a dividend on preferred shares.

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...

See similar textbooks

Similar questions

Which of the following statements is true? The outstanding number of shares is the maximum number of shares that can be issued by a corporation. The shares that are in the hands of the stockholders are said to be outstanding. It is very unlikely that corporations will have more than one class of stock outstanding. Preferred stock is stock that has been retired.
Issued stock is defined as stock that ________. A. is available for sale B. that is held by the corporation C. has been sold to investors D. has no voting rights
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
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.
A corporation might have treasury stock listed on their financials for all the following reasons except: A. they wish to control the market price B. they wish to be a majority stockholder C. they wish to limit dividend payments D. they wish to avoid takeover
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 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.
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 of the following is NOT a characteristic of an ordinary share? a) The dividends are at the discretion of directors b) They give voting rights at meetings c) They are irredeemable d) Interest is accrued if the dividend is not paid
i. Explain the corporate characteristic termed “no mutual agency” ii. Explain the corporate characteristic termed limited liability. iii. Explain the term outstanding stock. iv. Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferred stock? v. Is it true or false that all forms and classes of stock carry voting rights? vii. 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(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
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.