Preferred stocks are characterized by all the following, except voting rights are generally not present and not given to the holders of these stocks warrants may be attached to these securities the dividends declared for the investors of these stocks are tax deductible to the issuer O it may be convertible to ordinary or common stock
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- Preferred stock may have all of the following characteristics in common with bonds with the exception of Select one: A. a possible conversion option into common stock B. tax-deductible payments C. annuity payments D. the lack of voting rights E. a fixed liquidation valueExplain how convertible securities are determined to bepotentially dilutive common shares and how thoseconvertible securities that are not considered to be potentiallydilutive common shares enter into the determinationof earnings per share data.A convertible bond can be converted into ________. A. preferred stock B. common stock and then converted into preferred stock C. common stock of a different company D. common stock of the company
- Potential ordinary shares include the following, except: a. financial liabilities (or equity instruments), including preference shares, that are convertible into ordinary shares b. options and warrants c. shares that would be issued upon the satisfaction of conditions resulting from contractual arrangements, such as the purchase of a business, or other assets d. treasury shares that have been cancelled e. none of the aboveIn applying the treasury shares (i.e., cash in/cash out) method to determine the dilutive effect of shares, options and warrants, the proceeds assumed to be received upon exercise of the options and warrants Select one: a. are used to calculate the number of common shares repurchased at the average market price, when calculating diluted earnings per share. b. are added, net of tax, to the numerator of the calculation for diluted earnings per share. c. are disregarded in the calculation of earnings per share if the exercise price of the options and warrants is less than the ending market price of common shares. d. are deducted from the income available to common share holders. e. None of the above.Potential ordinary shares include the following, except: a. financial liabilities (or equity instruments), including preference shares, that are convertible into ordinary shares b. options and warrants c. shares that would be issued upon the satisfaction of conditions resulting from contractual arrangements, such as the purchase of a business, or other assets d. treasury shares that have been canceled e. none of the above
- Mandatorily redeemable preferred stock (preference shares) is reported among liabilities and their dividends are reported in the income statement as interest expense using a. U.S. GAAP. b. IFRS. c. Both U.S. GAAP and IFRS. d. Neither U.S. GAAP nor IFRS.1- Which of the following statement is the most true A) Preferred dividends in arrears are reported as current liability only if related preferred stocks are cumulative. B) A dividend payable in the form of additional shares of stock reported as current liability only when declared. C) Redeemable preferred stock should be reported as liability. D) A & B. E) None of the above. F) All of the above. 2- The Fair Value option under IAS: A) Required firms to report assets or liabilities at fair value on the balance sheet. B) The resulted unrealized gain or loss should by reported as other comprehensive income in the equity section/ BS. C) At the end of each accounting period company has the option to report assets or liability either at HC or fair value . D) A & B E) None of the above is truef. 3- under the equity method, unrealized holding gains (losses) are A. Reported as a separate component of stockholders' equity. B. Part of net income. C. Not recognized. D. Reported as other…Which statement is true regarding the accounting treatment for convertible preferred shares under IFRS? Question 21 options: a) Convertible preferred shares are initially measured at the fair value of the cash or other asset received. b) At conversion, a gain or loss is recognized on the difference between the carrying value of the equity portion of the shares and the fair value. c) Convertible preferred shares are subsequently measured at fair value. d) The liability and equity elements of convertible preferred shares must be presented separately on the statement of financial position.
- Which of the following statements is true regarding diluted earnings per share? Select one: a. Contingently issuable shares are considered outstanding in the computation of diluted EPS when any conditions for issuance are currently being met. b. To incorporate convertible bonds into the calculation, the denominator of the EPS fraction is decreased by the additional common shares assumed. c. It is assumed that stock options are exercised at the beginning of the period (or at the time the options are issued, if later) and the cash proceeds received are used to buy back (as treasury stock) as many of those shares as can be acquired at the closing market price for the period. d. To incorporate convertible securities into the calculation, the numerator is decreased by the interest (after-tax) that would have been avoided in the event of conversion.Which of the following is not a method that may be used to account for treasury shares?a. Cost methodb. Par value methodc. Retained earnings methodd. Constructive retirement methodCAnswer the multiple-choice question below: 1. Which of the following is/are incorrect about the characteristics of preferred stock: I.It has a fixed maturity date II.Dividends are tax-deductible III.Dividend payments vary just like common stock IV.Can be easily converted to a number of common stock Select one: a. I and II only b. I only c. I, II, and III only d. All of the above
