Exam 11: Reporting and Analyzing Equity

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

Retained earnings:

A stock dividend is a distribution of corporate assets that returns part of the original investment to shareholders.

A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:

A corporation reported net income of $2,730,000 and paid preferred cash dividends of $120,000 during the current year. There were 600,000 weighted-average shares of common stock outstanding and the market price per common share at year-end was $58.30. Calculate the company's price-earnings ratio.

Treasury stock is stock that has been authorized, issued, and is outstanding.

Preferred stock with a feature allowing preferred stockholders to share with common shareholders in any dividends in excess of the percent or dollar amount stated on the preferred stock is called:

Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception.