19 1 learning objective 19 1 1 the price a corporation pays when it reserves the rig 4303112

 

 

 

19.1   Learning Objective 19-1

 

1) The price a corporation pays when it reserves the right to retire or redeem stock at a specific price is the:

A) redemption value.

B) book value per share.

C) dividend per share.

D) market value.

 

2) The price at which shares are bought and sold on the open market is called:

A) book value.

B) dividend value.

C) market value.

D) redemption value.

 

3) When the corporation has only common stock, the total of stockholders' equity divided by the number of shares issued equals:

A) redemption value.

B) book value per share.

C) dividend per share.

D) market value.

4) When the corporation has both preferred and common stock, the steps to compute book value for common stock would be:

A) compute common shares divided by number of shares outstanding.

B) compute preferred stock book value first; the remainder is assigned to common stock.

C) divide total stockholders' equity by total shares outstanding.

D) None of these answers are correct.

 

5) If total stockholders' equity is $90,000 with 5,000 common shares outstanding, what is the book value per share?

A) $18.00

B) $45.00

C) $17,000

D) $1.80

 

6) What is the book value per share of common stock if total stockholders' equity is $450,000 with 15,000 shares of common stock outstanding?

A) $3.33

B) $3.00

C) $300.00

D) $30.00

 

7) Total stockholders' equity consists of retained earnings of $150,000 and paid-in capital of $600,000. There are 30,000 common shares outstanding. What is the book value per share?

A) $20.00 per share

B) $25.00 per share

C) $15.00 per share

D) $ 5.00 per share

8) Dexter Corporation has total paid-in capital of $160,000 and retained earnings of $60,000. It has 1,500 shares of $10 preferred stock with no dividends in arrears and 2,000 shares of $10 par value common stock. The book value of each share of common stock is:

A) $10.

B) $7.50.

C) $102.50.

D) $88.00.

 

9) Patterson Research has 200 shares of 10%, $100 par value, preferred stock, and 2000 shares of $10 par value common stock outstanding. Total paid-in capital is $40,000, and retained earnings are $0. There are one-year dividends in arrears on preferred stock. The book value per share on common stock is:

A) $10.

B) $40.

C) $20.

D) $9.

 

10) Ariel Investigations has total paid-in capital of $90,000 and retained earnings of $60,000. It has 200 shares of $100 par value common stock outstanding. The book value of each share of common stock is:

A) $750.

B) $450.

C) $300.

D) $600.