Chapter 7, Problem 1QTD

a.

Summary Introduction

To discuss: The definition of nonvoting stock associated with common stock.

Explanation of Solution

The definition of nonvoting stock associated with common stock is as follows:

A nonvoting stock that gives the investor practically zero decision on corporate issues, for example, mergers or the appointment of the directors. Such type of share may speak to investors who need to receive benefits from an organization's performance yet are less investing impacting its path.

b.

Summary Introduction

To discuss: The definition of stock split associated with common stock.

Explanation of Solution

The definition of stock split associated with common stock is as follows:

A stock split happens when a corporation recollects its shares outstanding and issues more than one offer for each beforehand share outstanding. At the end of the day, the corporation takes the shares outstanding the investors claimed, and the splits them into a bigger number of shares despite everything keeping up a similar total worth. It is likewise called as a forward stock split

c.

Summary Introduction

To discuss: The definition of reverse stock split associated with common stock.

Explanation of Solution

The definition of reverse stock split associated with common stock is as follows:

A reverse stock split is a decrease in the quantity of an organization's shares outstanding in the market. It is regularly founded on a fixed ratio.

d.

Summary Introduction

To discuss: The definition of stock dividend associated with common stock.

Explanation of Solution

The definition of stock dividend associated with common stock is as follows:

A stock dividend is a technique utilized by organizations to allocate capital to investors, it is made through dividend payment through shares instead of paying in cash. Stock dividends are essentially given instead of cash dividends when the organization is low on liquid cash available.

e.

Summary Introduction

To discuss: The definition of book value associated with common stock.

Explanation of Solution

The definition of book value associated with common stock is as follows:

Book value is the equity value of the company which is stated in the financial statement of the company. The book value figure is normally seen corresponding to the organization's stock worth and is dictated by taking the total value of an organization's assets minus any of the liabilities if a company be indebted.

f.

Summary Introduction

To discuss: The definition of treasury stock associated with common stock.

Explanation of Solution

The definition of treasury stock associated with common stock is as follows:

A treasury stock is generally a corporation's recently issued shares of common stock that have been bought from the investors, however the organization has not resigned the shares. The total number of shares of treasury stock is the contrast between the total number of shares gave and the total number of shares that are outstanding.