Exam 34: Financial Structure

What is the principal source for corporate financing?

Which of the following determines when to declare dividends and in what amount?

The RMBCA has adopted a net assets test for the issuance of dividends.

The earned surplus test does not permit capital surplus to be used for the payment of dividends.

Preemptive rights are shareholders' rights to purchase a proportionate part of a new issue of stock.

A share dividend:

The board of directors of Z & X Corporation declared cash dividends of $5 per share.If these dividends are not paid,a shareholder can bring suit to require payment.

Phoenix Corporation purchases 1,000 shares of its own stock from Stewart,a shareholder,at a price of $50 a share.These shares will be known as:

In some states,preemptive rights do not apply to:

Shareholders have residual authority over increases in the amount of authorized capital stock.

The statute which contains the rules applicable to investment securities transfers is:

If 100 shares of $50 par value stock were issued at $75 per share,how much would constitute capital surplus?

Under the majority rule,an unsuspecting shareholder who receives an illegal dividend from a solvent corporation cannot be compelled to refund the dividend.

In which of the following ways do debt and equity securities necessarily differ?

Harry bought preferred noncumulative stock on which there were no dividends declared for the year.The dividends that were not declared for the year will:

A stock split results in a larger proportion of corporate ownership by the shareholder.

Dividends paid in stock of the corporation have virtually the same legal significance as cash or property dividends.

Which of the following is not a right conferred on the owner of an equity security?

The Revised Act permits a corporation to purchase,redeem,or otherwise acquire its own shares unless:

Hunter recently purchased 1,000 shares of Forrest Corporation stock,but now receives additional 100 shares of Forrest stock,which represent a ratable distribution of additional shares by the corporation.Hunter's receipt of additional shares is a: