AC 113 UNIT 9 QUIZ Question 1. Question : Assume that Corporation X has 20,000 shares of $10 par value cumulative 6% preferred stock and 5,000 shares of common stock outstanding. No dividends were paid in 2009 and 2010. In 2011, the board of directors declares dividends of $50,000. What is the total cash paid to the preferred stockholders in 2011? Student Answer: $12,000 $24,000 $36,000 Zero Question 2. Question : Which of the following is FALSE? Student Answer: Accounts payable always require payment of interest. Notes and bonds require interest to be paid periodically. Vendors and suppliers help to finance operations. Most businesses maintain a normal amount of accounts payable. Question 3. Question : Stock dividends are: Student Answer: distributions of common stock to holders of common stock distributions of cash or other assets to shareholders normally recorded at the par value of the stock issued required of companies periodically, according to their corporate charters Question 4. Question : If the contract rate is lower than the market rate, the bonds will sell at __________. Student Answer: a discount a premium face amount Cannot be determined from facts given Question 5. Question : Mickey Mouse Co. announced a 2-for-1 stock split of its $20 par value common stock, which is currently trading for $60 per share. What is the new par value and the estimated market price of the stock after the split? What is the New Par Value and the Estimated market price of the stock? Student Answer: $10, $30 $20, $30 $10, $60 $40, $120
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