Exam 8: Stock

Preferred stock dividends are 1. a legal obligation 2. not a legal obligation 3. exempt from federal income taxation 4. not exempt from federal income taxation

If a firm's inventory turnover is 4 and days sales outstanding (average collection period)is 60, then it takes approximately five months for newly acquired inventory to generate cash.

If a cumulative preferred stock pays a dividend, it is said to be in arrears.

If the ratio of debt to equity increases, the proportion of assets financed by debt is increased.

Inventory turnover may increase if

Cash dividends 1. are paid from earnings 2. increase the capacity of the firm to grow 3. reduce the firm's assets

Cash dividends are subject to federal income taxes.

Corporate retained earnings are taxed on the individual investor's federal income form.

Issuing a stock dividend will immediately cause

Which of the following immediately occurs when a stock is split two-for-one?

Determine a firm's earnings per share from the following information.

An increase in retained earnings will increase the debt to equity ratio.

As times-interest-earned increases,

Stock dividends increase the firm's cash.

Stockholders generally have which of the following rights? 1. right to vote 2. right to share in the firm's earnings 3. right to sell the stock

The quick ratio

The quick ratio excludes inventory, plant, and equipment.

The procedure for the distribution of dividends does not include

If an investor buys stock on the ex-dividend date, that individual will not receive the dividend.

A firm's stock sells for $100 a share. What will be the price after a a. two-for-one split b. four-for-one split c. one-for-two reverse split?