MCQS

QUESTION 22

1. Dividend reinvestment plans involve the purchase of ____.

   	a.	existing stock
   	b.	newly issued stock
   	c.	both newly issued and existing stock
   	d.	letter stock

1 points

QUESTION 23

1. All except which of the following have been cited as advantages of leasing by small businesses?

   	a.	Lower effective interest costs relative to borrowing
   	b.	Fewer restrictive covenants from lessors than lenders
   	c.	Less cash required up front
   	d.	Quicker approvals from lessors than from lenders

1 points

QUESTION 24

1. Which of the following is NOT a direct result of a stock dividend?

   	a.	The per-share price of the stock goes up.
   	b.	The amounts shown in the firm's capital accounts are redistributed.
   	c.	The market price of each outstanding share is increased.
   	d.	The number of shares outstanding is increased.

1 points

QUESTION 25

1. The Earth Shoe Company, whose stock has a market value of $20, has the following common equity accounts on its balance sheet:

   Common stock ($1 par, 1,000,000 shares)	$ 1,000,000
   Contributed capital in excess of par	$14,000,000
   Retained earnings	$52,000,000
   Total common stockholders' equity	$67,000,000

   If the firm declares a 5% stock dividend, what will be the retained earnings figure after the dividend is paid?

   	a.	$5,000,000
   	b.	$14,950,000
   	c.	$51,000,000
   	d.	$1,000,000

1 points