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Generally the major difference between preferred shares and common shares is a) there are no significant differences between preferred and common shares. b) common shares
- Generally the major difference between preferred shares and common shares is
a) there are no significant differences between preferred and common shares.
b) common shares have a priority claim over corporate assets.
c) preferred shares have voting rights.
d) preferred shares are restricted by the amount of dividends that can be paid out.
- In 2020, Bouchard Enterprises reported net income of $75,000 and declared a dividend of $40,000. The dividend is to be paid on February 1, 2021 to shareholders of record on January 15, 2021. The balance in the retained earnings account on January 1, 2020 was $140,000. At Bouchards year end on December 31, 2020 the company reported the following ending balance for retained earnings on the statement of changes in shareholders equity:
a) $115,000
b) $175,000
c) $215,000
d) $35,000
- Seaside Developments Inc. has $200,000 of no par value 4% cumulative preferred shares, and 12,000 shares of no par value common shares outstanding. In its first three years of operation, the company paid cash dividends as follows: Year 1: $8,000; Year 2: $18,000; and Year 3: $24,000. The amount of dividends received by the preferred shareholders in year 2 was
a) $12,000
b) $8,000
c) $18,000
d) $9,000
- In order to understand a companys business, an analyst must understand the corporations strategy. Which of the following is an example of a corporate strategy?
a) being a high-cost producer
b) being a low-volume producer
c) being a low-cost producer
d) following product simplification
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