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Exam 11: Corporate Reporting and Analysis

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Question 71

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Book value per share reflects the value per share if a company is liquidated at balance sheet amounts.

A) True
B) False

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Question 72

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All of the following statements regarding stock dividends are true except:

A) Directors can use stock dividends to keep the market price of the stock affordable.
B) Stock dividends provide evidence of management's confidence that the company is doing well.
C) Stock dividends do not reduce assets or equity.
D) Stock dividends decrease the number of shares outstanding.
E) Stock dividends transfer a portion of equity from retained earnings to contributed capital.

F) A) and D)
G) D) and E)

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Question 73

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If a company has no preferred stock,basic earnings per share is equal to net income divided by the number of weighted average common shares outstanding.

A stock split can be done in any ratio.

________ is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

A company had the following stockholders' equity on January 1: On January 10,the company declared a 40% stock dividend to stockholders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

When preferred stock is cumulative and the directors either do not declare a dividend to preferred stockholders or declare one that does not cover the total amount of cumulative dividends,the unpaid amount is called ________.

A class of stock for which there is no minimum legal capital is called:

A stock dividend,declared by a corporation's directors,is a distribution of additional shares of the corporation's own stock to its stockholders without any payment in return.

A liability for a cash dividend does not exist until the directors declare a cash dividend.

A stock ________ keeps stockholder records and prepares official lists of stockholders for stockholder meetings and dividend payments.

A company was organized in January Year 1 and has 20,000 shares of $10 par value,10%,nonparticipating preferred stock outstanding and 150,000 shares of $2 par value common stock outstanding.It has declared and paid cash dividends each year as shown below.Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.

A company paid $0.85 in cash dividends per share.Its earnings per share is $3.50,and its market price per share is $35.50.Its dividend yield equals:

Stated value of no-par stock is:

The dividend yield is computed by dividing:

A special right often granted to preferred stock is additional voting privileges.

A common statutory restriction is reported on the income statement; whereas a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

What is a stock split? How is a stock split different from a stock dividend?

A company has 500 shares of $60 par value preferred stock outstanding.It also has 20,000 shares of common stock outstanding,and the total value of its stockholders' equity is $680,000.The company's book value per common share equals:

A corporation had the following stock outstanding when the company's board of directors declared a $55,000 cash dividend during the current year: Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.