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Exam 11: Corporate Reporting and Analysis

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Question 41

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Stock not assigned a value per share by the corporate charter,allowing it to be issued at any price,is called ________.

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Question 42

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Corporations may buy back their own stock for any of the following reasons except to:

A) Avoid a take-over.
B) Have shares available for a merger or acquisition.
C) Have shares available for employee compensation.
D) Maintain market value for the company stock.
E) Allow management to assume the voting rights.

F) B) and E)
G) A) and B)

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Question 43

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A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

Dividend yield is computed by dividing earnings per share by the market value per share.

Percy Corporation was formed on January 1.The corporate charter authorized 100,000 shares of $10 par value common stock.During the first month of operation,the corporation issued 400 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation.The entry to record this transaction would include:

A company has net income of $90,000; its weighted-average common shares outstanding are 18,000.Its dividend per share is $0.45,its market price per share is $88,and its book value per share is $76.Its price-earnings ratio equals:

A company has 50,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $1,470,000,and the par value per common share is $5.The book value per share is:

Common stock always carries a preference for receiving dividends over preferred stock.

A company made an error in calculating and reporting amortization expense in Year 1.The error was discovered in Year 2.The item should be reported as a prior period adjustment:

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

When the dividend rate on preferred stock is less than the rate of return earned on a corporation's assets,it is called:

The price-earnings ratio is calculated by dividing:

Given the following information about a corporation's current year activities,compute the retained earnings for the current year.

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the amount stated on the preferred stock.

A registrar keeps stockholder records for dividend payments and stockholder meetings.

A debit balance in retained earnings is referred to as a retained earnings deficit.

A stock split increases total stockholders' equity.