Which of the following describes a balance sheet? A) Reports the amount and composition of assets and liabilities at a specified point in time? B) Reports cash receipts and cash disbursements for a specific accounting period. C) Reports the amount and composition of assets and liabilities at a specific accounting period. D) Reports revenues and […]
Tender offer repurchase is a repurchase program in which a firm ________. A) offers to repurchase a fixed number of shares, usually at a discount relative to the market value B) offers to repurchase a fixed number of shares, usually at a premium relative to the market value C) offers to repurchase a fixed number […]
Which of the following is a reason for a firm for repurchasing its shares? A) to diminish the shareholder value by increasing the number of shares outstanding and thereby raising earnings per share B) to help encourage a friendly takeover by increasing the number of publicly traded shares C) to make shares available for stock […]
The net effect of a stock repurchase is ________. A) similar to an interest payment B) similar to a cash dividend C) similar to a stock split D) similar to a reverse stock split ANSWER B
Which of the following is the least liquid current asset? A) Accruals B) Accounts receivable C) Marketable securities D) Inventory ANSWER D
Which of the following is true of a dividend payout? A) When a firm announces that it will increase its dividend, the share price usually decreases on that news. B) Dividend payments send a positive signal to investors in the marketplace that management believes that the stock is overvalued. C) When a firm pays out […]
Which of the following methods can be utilized by a firm when it wants to purchase outstanding shares of common stock? A) a purchase of stock through private placement B) a tender offer at varying prices C) a tender offer at a specified price D) an European auction plan ANSWER C
Dividends provide information about a firm’s current performance. Indicate whether the statement is true or false ANSWER FALSE
When common stock is repurchased and retired, the underlying motive is to ________. A) delay taxes B) boost the stock’s dividends C) distribute the excess cash to the owners D) reduce the retained earnings balance ANSWER C
Holders of record are stockholders whose names are recorded on the date of record receive the declared dividend. Indicate whether the statement is true or false ANSWER TRUE
