ACCT HW 9

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QUESTION 1  Which best describes par value for stock?   A. An arbitrary amount set by the company for each share of stock   B. The current market value of the stock   C. The amount expected to be paid out as a dividend on a share of stock   D. The value at which stock shares were issued

Which of the following methods should be used to account for the conversion of preferred stock to common stock?   Book Value Market Value I. Yes No II. Yes Yes III. No Yes IV. No No III IV I II

A stock's par value refers to the: O A. Issue price of the stock. O B. Value assigned per share by the corporate charter. O C. Market value of the stock on the date of the financial statements. D. Maximum selling price of the stock.

Which of the following decreases total equity? A. A stock split B. Recording Revenue C. The purchase of Treasury Stock D. Issuance of Convertible preferred stock

ANSWER

A company has debt, preferred stock, and common stock outstanding.  Rank these securities in terms of required return, from lowest to highest.   Question 9 options:   Debt < Preferred Stock < Common Stock   Preferred Stock < Debt < Common Stock   Common Stock < Debt < Preferred Stock   Preferred Stock < Common Stock < Debt

Match each of the following preferred stock features with its description.Preferred Stock                       Features Description 1. Convertible             a. Prior unpaid dividends receive priority. 2. Redeemable           b. Shares can be sold at a predetermined price. 3. Cumulative            c. Shares can be exchanged for common stock.

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