How does a a corporation issue stock?
A corporation can pay a brokerage house to issue its stock. Some brokerage houses underwrite an indirect issuance of stock; they buy the stock from the corporation and resale it to investors. Organization expenses, or the costs to organize a corporation, include which of the following?
Do preferred stockholders have a right to a dividend?
(Cumulative/noncumulative) preferred stockholders have a right to be paid both the current and all prior periods' unpaid dividends before any dividend is paid to common stockholders. On August 20, Max, Inc. issues 100 shares of $1 par value preferred stock for $3,000 cash.
What does a statement of stockholders equity list?
A statement of stockholders' equity lists balances of: Check all that apply. Linus, Inc. holds 100 shares of treasury stock purchased for $10 per share.
What should a bank consider when selling securities to meet liquidity needs?
When selling securities to meet liquidity needs, a bank should consider all of the following except: a. brokerage fees. b. lost interest income. c. the gains or losses on the securities. d. the impact on taxes. e. A bank should consider all of the above when selling securities to meet liquidity needs. D 22.
What is the purpose of large cash balances?
c. Larger cash balances reduce the risk of paying penalties to the Federal Reserve.
What does "help" mean in a check?
e. To assist in the check clearing process.
What is a dealer in the stock market?
A dealer is a person who assists in the trading process by buying or selling securities in the market for an investor.
What is primary market?
The primary market is a market in which securities are traded among investors.
What is underpricing in a market?
Underpricing represents the difference between the aftermarket price and the offering price.
What is a churning broker?
Churning happens when a broker constantly buys and sells securities from a client's portfolio in an effort to generate commissions.
Why do firms use shelf registration?
All firms can use shelf registration which saves issuers both time and money.
What is market order?
A market order is an order for immediate purchase or sale at the best possible price.
How many blue chip stocks are in the Dow Jones Industrial Average?
The Dow-Jones Industrial Average is made up of 30 large blue-chip stocks.
Which of the following reasons exists for safety stock?
Safety stock exists for which of the following reasons?#N#A. To allow less expensive purchases by buying more.#N#B. To allow for transportation time.#N#C. To provide protection against the uncertainties of supply and demand.#N#D. None of these .
When is safety stock not needed?
A. Safety stock is not needed when periodic review systems are used.
How does investing in capital stock increase wealth?
Investing in the capital stock of corporations gives owners two potential ways to increase their wealth: 1) if the stock price increases 2) if the corporation pays dividends.
What is the difference between an investor and a creditor?
An investor is an individual or entity who purchases stock in a business and becomes an owner of that business. A creditor is an individual or entity who loans money to a business. The creditor is not an owner, but does have the right to be repaid.
What is financial accounting?
Financial accounting relates to profiding information to those outside of the organization so that they can make decisions about the organization as a whole. Managerial accounting provides information for those inside of the organization so that they can make decisions on behalf of the organziation.
What is a corporation?
A corporation is an organization that has been formally recognized by a government as a legal entity. It has certain rights such as the right to sell stock in itself and the right to form contracts
Why would a business want to become a business?
A business would want to become a business for several reasons, including raising capital and liability issues. This chapter discussed the advantage that corporations have in being able to sell stock to raise money
When do individuals become owners of a corporation?
Entities and individuals become owners when they purchase stock in the corporation. Because a C Corporation is a separate entity from its owners, it does not cease to exist upon the death or departure of an owner. This separation between corporation and owners also greatly limits the liability of the owners.
Is it true that a stock is held longer than a year?
True: An investment in stock held longer than a year may be subject to lower capital gains tax rates. True or False: Corporations are required by law to pay dividends to their shareholders.
What is capital _____?
Capital _____ is a general term that refers to any shares issued to obtain capital ( owner financing).
What is market value per share?
The market value per share is the price at which stock is bought and sold. Which of the following factors does not influence market value?
Can a corporation pay a brokerage house to issue stock?
A corporation can pay a brokerage house to issue its stock. Some brokerage houses underwrite an indirect issuance of stock; they buy the stock from the corporation and resale it to investors.