When comparing common and preferred stock, indicate whether each of the following statements is true or false. Preferred shareholders are guaranteed to receive a higher dividend amount than common shareholders. Choose... + In a year in which dividends are declared, preferred stockholders receive their portion of dividends before Choose... + common stockholders receive theirs. Preferred shareholders are guaranteed to receive a dividend in any year in which the corporation makes a Choose... + profit. For purposes of electing the company's board of directors, only preferred shareholders usually have a vote. Choose... +

When comparing common and preferred stock, indicate whether each of the following statements is true or false. Preferred shareholders are guaranteed to receive a higher dividend amount than common shareholders. Choose... + In a year in which dividends are declared, preferred stockholders receive their portion of dividends before Choose... + common stockholders receive theirs. Preferred shareholders are guaranteed to receive a dividend in any year in which the corporation makes a Choose... + profit. For purposes of electing the company's board of directors, only preferred shareholders usually have a vote. Choose... +

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 36MCQ

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Similar questions

Which one of the following statements is the most correct? A. Preferred stock has a fixed dividend that does not change. B. All classes of common stock have one vote per share. C. Common shareholders elect the CEO of the company D. Dividends are tax-free income for individual investors.
When a corporation has outstanding both common and preferred stock Select one: a. Earnings per share is computed without regard to the amount of dividends declared on common stock. b. Basic and diluted earnings per share are reported only if the preferred stock is cumulative c. Earnings per share is reported for each type of stock outstanding d. Earnings per share is computed without regard to the amount of the annual preferred dividends.
Cumulative preferred dividends in arrears should be shown in a corporation's balance sheet as: O A footnote O An increase in current liabilities O An increase in current liabilities for the current portion and long-term liabilities for the long-term portion O An increase in stockholders' equity
Match each of the following terms with the appropriate definition. A document that gives a designated agent the right to vote a stockholder's shares of stock. The date specified by corporation directors for identifying stockholders to receive dividends. The date on which the directors vote to pay a cash dividend. The ratio of a company's current market value per share to its net income per share. Occurs when a corporation calls in its stock and replaces cach 1. Dividend Yield share with more than one 2. Reverse Stock Split new share; decreases both the market value per share and the par or stated value per share. 3. Convertible Preferred Stock 4. Price-Earnings Ratio Net income less preferred dividends divided by weighted-average 5. Date of Record common shares 6. Proxy outstanding. 7. Stock Split Stock that gives its holders the option to exchange their shares for common shares at a specified rate. 8. Basic Earnings per Share 9. Cumulative Preferred Stock Stock that has a right to be…
The cost of dividend payable on redeemable preference shares should be included in______. Select one: a. in the statement of income after identifying profit after tax b. in the statement of income before identifying the profit before tax c. as a deduction in the statement of changes in equity d. in the statement of income as a deduction prior to identifying profit from operations
If a corporation fails to declare a dividend on cumulative preferred stock in a given year, the dividends in arrears accumulate from period to period. the dividends in arrears are recorded as liabilities. the common shareholders may still receive dividends in the current year. all of these options apply.
Which one of the following statements apply only to preference shareholders and not to equity shareholders a. Shareholders risk the loss of investment b. Shareholders bear the risk of no dividends in the event of losses c. Shareholders usually have the right to vote d. Dividends are usually given at a set amount in every financial year
Which of the following statements is true regarding the payment of dividends to preferred shareholders? O a. Payments to debtholders are paid before dividends are paid to preferred shareholders. O b. Dividends to preferred shareholders are a tax-deductible expense to the issuing company. O c. Dividends to preferred shareholders are paid before payments are made to debtholders. O d. Dividends to preferred shareholders are paid after dividends are paid to common shareholders.
If a corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? 2. Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer.
Shareholders choose to invest in preferred shares because: a. preferred shares can always be converted into ordinary shares at the shareholder's option b. preferred shares include the right to participate in management decisions through voting privileges c. dividends are distributed to preferred shareholders before ordinary shareholders d. the preferred dividend distributions are generally increased each year
The total amount of cash and other assets received by a corporation from the stockholders inexchange for the shares is ________.A. always equal to par valueB. referred to as retained earningsC. always below its stated valueD. referred to as paid-in capital
The issuer of a 5% common stock dividend to common shareholders should transfer from retained earnings to contributed capital an amount equal to the Select one: A. par or stated value of the shares issued. B. market value of the shares issued. C. book value of the shares issued. D. minimum legal requirements.