Chapter 5, Problem 34P

Which of the following affects the total Shareholders’ Equity?     a. Declaration of a scrip dividend b. Declaration of share split c. Appropriation of retained earnings d. Retirement of treasury shares

Which of the following is not a common characteristic of preferred stock? Select one: a. Callability by the corporation b. Voting rights c. Preference as to dividends d. Preference in liquidation

.What account should be debited when stock issuance costs are associated with the initial issuance of stock at incorporation? Group of answer choices a. Organization Expense b. Additional Paid-in Capital c. Organization Costs d. Common stock

There are two primary means to earn income as a stockholder. The first method is dividend income, and the second method is earnings from capital gains. With respect to the investor seeking dividend income, when an investor buys a stock from a corporation with a primary focus to earn dividend income, they will typically expect a higher dividend on common stock versus preferred stock. Discuss the dividend payment requirements of a common stock versus preferred stock, in terms of which type of stock has a primary claim on dividend distributions. Explain why the common stock investor demands a higher dividend rate.

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.

Which of the following is not a characteristic that sets preferred stock apart from common stock? A. voting rights B. dividend payments C. transferability D. ownership