What is the difference between common and preferred stock dividends?
A. Dividends are paid before common B. Dividends are paid quarterly C. Dividends are based on corporate earnings D. Preferred shareholders have a senior claim to common shareholders B. Dividends are paid quarterly ABC gold mining company has issued a preferred stock. Dividends on the issue may be paid as: A. Cash only
What happens to preferred stock if a company fails to pay dividends?
B) Failure to pay dividends will result in default. C) Preferred stock has a lower-priority claim on the firm's assets than the firm's creditors in the event of default. D) Preferred stock typically pays a fixed dividend.
What happens to preferred stock prices when interest rates fall?
When interest rates fall, preferred stock prices rise D. When interest rates fall, preferred stock prices rise ABC 10% $100 par preferred is trading at $115 in the market. The current yield is:
How many shares of preferred stock does firm B have?
The number of (authorized/issued/outstanding/treasury) shares is stated in the corporate charter that is filed with the state of incorporation. authorized Firm B has $3, $50 par value cumulative preferred stock, 50,000 shares authorized and issued, and 40,000 shares outstanding. Dividends are paid quarterly, and no dividends are in arrears.
What is preferred stock?
Preferred stock is different from common stock in that preferred stock: has a limited claim on the company's assets in the event of liquidation. does not generally have voting rights. has several debt-like features. Cash account is debited for the (market/par) value per share of common stock issued. market.
Why do companies reacquire their own common stock?
Companies reacquire their own common stock and hold it as treasury stock: because the management of these companies believe that the market price for their common stock is temporarily low and will soon recover. for future use for employee stock purchase plans. to later be resold for cash if additional capital is needed.
What is a stock scrip?
The issuance of additional shares of common stock to stockholders in proportion to the number of shares each currently owns is referred to as a (scrip/ stock/bond ) dividend. stock.
What is preferred stock and maturity value?
Liquidating value (for preferred) and maturity value (for bonds) both represent a fixed claim to assets. Preferred stock and bonds payable are both usually callable and may be convertible. Dividends (for preferred) and interest (for bonds) both normally represent a fixed claim to income.
What is prior period adjustment?
Prior period adjustments: are direct adjustments to retained earnings for the correction of errors. may result in either an increase or decrease to retained earnings.
What are the effects of treasury stock purchase?
The effects on the financial statements of the purchase of treasury stock include: a decrease to cash. a decrease to total stockholders' equity. The effects on the financial statements of the sale of treasury stock for a price greater than the treasury shares were purchased for include: an increase to cash.
What is a cash account?
Cash account is debited for the (market/par) value per share of common stock issued. market. The number of shares that have been sold for cash (or in exchange for other assets) is referred to as (authorized/issued/treasury) shares. issued.
What is preferred stock?
T. The stocks of well-known companies are referred to as "preferred stock.". F. Common stockholders usually have more dividend rights than preferred stockholders. F.
What is an IPO?
If you cannot afford the possible loss, you should not make that investment. T. An initial public offering (IPO) is characterized by all of the following except.
What is preferred stock and bonds payable?
Identify the similarities between preferred stock and bonds payable. Preferred stock and bonds payable are both usually callable and may be convertible. Dividends (for preferred) and interest (for bonds) both normally represent a fixed claim to income.
Why does the market value of common stock decrease after dividend?
Immediately after the issuance of a stock dividend, the market value per share of common stock for the company should normally: decrease because more shares of stock are now outstanding, but the total market value of all shares remains the same. Identify the similarities between preferred stock and bonds payable.
What does the caption on a stock mean?
After a stock split, the Common Stock caption of stockholders' equity indicates a drop in the par value per share (if appropriate). After a stock split, the total market value of the company's outstanding stock usually does not change.
Does preferred stock have a maturity date?
Preferred stock has no maturity date; bond principal must be paid at maturity. The number of (authorized/issued/outstanding/treasury) shares is stated in the corporate charter that is filed with the state of incorporation. authorized.
Is preferred dividend a tax expense?
Preferred dividends are not an exp ense and are not deductible for tax purposes; bond interest is an expense and is deductible for tax purposes.F. The issuance of additional shares of common stock to stockholders in proportion to the number of shares each currently owns is referred to as a (scrip/stock/bond) dividend. stock.
What does "owners of preferred stock" mean?
A.Owners of preferred stock have the right to vote on major policy decisions affecting the company. B.Owners of preferred stock generally must receive at least a certain amount of dividends in each period before the owners of common stock can receive any dividends.
Do preferred stock owners have to receive dividends?
B.Owners of preferred stock generally must receive at least a certain amount of dividends in each period before the owners of common stock can receive any dividends. Suppose that one of your classmates informs you that he has developed a method of forecasting stock market returns based on past trends.
