10.

Which of the following is a reason why a corporation may choose not to pay dividends?

Multiple Choice

The board and management prefer to reinvest all net income for future growth.

The corporation does not have adequate cash.

The corporation does not have adequate retained earnings.

All of these are valid reasons to not pay dividends.

11.

The book value of a share of stock is equal to the market or selling price of the stock.

Group startsTrue or False

True, False

12.

Preferred stockholders generally have no voting rights in a corporation.

Group startsTrue or False

13.

A corporation must record a liability for cash dividends on the date of record.

Group startsTrue or False

14.

When a corporation records a stock dividend, it decreases the retained earnings account for the par value of the stock.

Group startsTrue or False