The directors of Merchant Corporation are considering the issuance of a stock dividend. They have asked you to discuss the proposed action by answering the following questions. Instructions a.    What is a stock dividend? How is a stock dividend distinguished from a stock split (1) from a legal standpoint, and (2) from an accounting standpoint? b.    For what reasons does a corporation usually declare a stock dividend? A stock split? c.    Discuss the amount, if any, of retained earnings to be capitalized in connection with a stock dividend.

Q: For large publicly listed and traded companies, which of the following should not be done as a step…

A: The question is related to Audit Evidence. In gathering evidence concerning the company's capital…

Q: Which one of the following is the date on which the board of directors agrees to pay a dividend and…

A: The dividend is paid to shareholders from the retained earnings of the business.

Q: es Company makes flanges for its main product of widgets. The cost of making each widget is as…

A: Solution: Relevant cost of making = Direct material + direct labor + variable overhead  = 3.60 + 10…

Q: Match each of the following stockholders' equity concepts to the appropriate term (a – h).…

A: Corporation: A group of people or a company that has been granted legal status as a single entity by…

Q: Which one of the following statements apply only to preference shareholders and not to equity…

A: Preference shares and equity shares are two common classes of shares. They have some distinct…

Q: Identify the two conditions that must be met for a stock dividend to be nontaxable. OA) O B) C) The…

A: Certainly! Let's break down each condition:B) The corporation must issue the stock dividend to only…

Q: What are some reasons corporations issue stock dividends?

A: Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in…

Q: corporation,dividend,limited liability,over-the counter market,stock exchange and stock market index

A: In finance we often hear the words corporation, dividends, limited liability etc. These are all…

Q: Identifythebasicrightsinherentinownershipofcommonstockandexplainhowownersexercisethem

A: Common stock is a type of ownership in a corporation that represents a share of its equity. Owners…

Q: What is a stock split.  How does shareholder's equity change after a stock split?

A: Shareholder’s equity: It is the owner’s share in the business after paying off all the liabilities…

Q: Which of the following describes preferred stock? a. Stock which gives shareholders certain…

A: The shares are classified as common and preferred shares. The shares can be issued at premium or…

Q: A stock market, such as the New York Stock Exchange(NYSE) or NASDAQ, trades shares (stock) of public…

A: Introduction: The term going public or becoming public means that a prIvate company would approach…

Q: An initial public offering (IPO) occurs

A: Trading securities means the management plans either to purchase or sell the securities in the stock…

Q: Identify which category of shareholder's equity is affected by the item and briefly explain how it…

A: Statement of stockholders’ equity refers to a financial statement which shows the shares issued to…

Q: Unless stated otherwise in the prospectus, which of the following accrue to holders of common stock?…

A: Meaning of common stock:Common stock represents ownership in a corporation and holders of common…

Q: issued shares to another company or individual. This a transaction that would be traded in the…

A: There are primary as well as secondary market

Q: corporation might have treasury stock listed on their financials for all the following reasons…

A: solution concept treasury stock means the stock that is bought back by the company When the stock is…

Q: Which one of the following is a primary market transaction? Multiple Choice O O O O Sale of…

A: The financial markets are broadly divided into primary and secondary markets. These markets…

Q: Select the best term for each definition below. Definitions 1 Shares held by investors (shares…

A: In the world of corporate finance and stock ownership, there are several terms that are commonly…

Q: The declaration and issuance of a stock dividend results in a reduction of the issuing corporation's…

A: A stock dividend is a dividend payment made in the form of additional shares rather than a cash…

Q: Describe what is IPO and what is involved in the IPO process. Do you think that it is better to buy…

A: IPO is initial public offering that means the company in this shares of company are sold to common…

Q: Explain the significance of CALLS to the business that issued shares?

A: Shares are the units of the total stock of a company which shows the fractional ownership of the…

Q: Please answer the multiple choice questions with only simple explanation. Thankyou! 6.) Assets or…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: or what reason might a company purchase treasury stock? To increase shareholder liquidity To…

A: Treasury shared means purchasing own shares of company.

Q: What is the Effective Annual Rate (EAR) and what is its purpose?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: The par value of common stock represents a. the estimated fair value of the stock when it was…

A: The correct answer is Option (a).

Q: Which of the following would NOT be a right of a common stockholder?   1. Receive interest income…

A: The Commons Shareholders are an real owners of the company they have all rights to elect the board…

Q: Companies can issue different classes of common stock. Which of the following statements concerning…

A: A Company may issue various types of shares. These Shares are classified in different classes. These…

Q: What do you call those investors who buy shares of stocks of a company and become legal part owner…

A: The company includes owner and creditor during the year. Owners are the investors who invest into…

Q: Private placement is the: a. Sale of securities indirectly to a select group of investors. b. Sale…

A: Equity financing is referred as the fund raising for a company by selling its shares. The person who…

Q: Which of the following are the two financial requirements that the board of directors must consider…

A: The dividends are paid to outstanding shareholders.

Q: Which of the following represents one of the basic rights of stockholders? a. Stockholders may sell…

A: One of the basic rights of stockholders is "Stockholders may participate in management by voting on…

Q: Define treasury stock. Why might a corporation acquire treasury stock? How is treasury stock shown…

A: Treasury stocks are the shares which are reacquired by the company that are already issued to the…