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Exam 11: Corporate Reporting and Analysis

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Question 71

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A company paid a cash dividend of $0.88 per share during the current year,and reported 18,000 shares of common stock issued,and 2,000 common shares in treasury stock during the current year.The year-end market price per share was $27.50.Calculate the following: (1)total amount of cash dividends paid to common shareholders,and (2)dividend yield.

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(1)$0.88 * (18,000 shares - 2,...

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Question 72

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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) 9.0.
B) 17.6.
C) 12.5.
D) 15.2.
E) 16.9.

F) B) and D)
G) B) and C)

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Question 73

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The following data were reported by a corporation: $\begin{array} { l c } \text { Authorized shares } & 20,000 \\\text { Issued shares } & 15,000 \\\text { Treasury shares } & 3,000\end{array}$ The number of outstanding shares is:

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Alto Company issued 7% preferred stock with a $100 par value.This means that:

The amount of income earned per share of a company's outstanding common stock is known as:

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

A company has $2,400,000 in stockholders' equity that includes 500 shares of $50 par value noncallable preferred stock outstanding and 250,000 shares of common stock outstanding.Calculate the book value per (1)preferred share,and (2)common share.

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

A premium on common stock:

________ is the amount of income earned per share of a company's outstanding common stock.

Common shareholders always share equally with all other shareholders in dividends.

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration,the dividends account is closed to Retained Earnings at the end of the accounting period.

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

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

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Stocks with a price-earnings ratio less than 20 to 25 are likely to be overpriced.

________ is the stockholders' equity applicable to common shares divided by the number of common shares outstanding.

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Par value of a stock refers to the: