select the following statements that are correct regarding dividends

1. A firm can use retained earnings without paying a flotation cost. declared.unanswered, ___The date of record refers to the date a cash dividend is paid (A) The Act calls for increased oversight responsibilities for boards of directors. Which of the following statements about the dividend growth model are true? a) The model pr ices s hares on the basis of the present value of expected future dividends. earnings.unanswered, ___Dividends payable is recorded at the time a cash dividend is The investing section does not change when a company chooses the direct method. *A Stock Dividend Increases The Number Of Outstanding Shares. B) stock repurchases tend to reduce financial leverage. In the statement of cash flows, a decrease in accounts payable is reported as a use of cash. Which of the following statements are true regarding dividends? For fill-in-the-blank questions press or click on the blank space provided. Which of the following statements is true regarding dividend income? for a wrong answer. *Stock dividends are a mechanism to keep the market price of 1. '-'Your answer is correct. Preference shares, more commonly referred to as preferred stock, are shares of a company’s stock with dividends that are paid out to shareholders before common stock dividends … Privacy The date of record refers to the date a cash dividend is paid to stockholders. D. l!! A stock dividend increases the number of outstanding shares. The declaration date is the day on which a company issues a statement declaring its intent to pay a dividend. a. Which of the following statements regarding the accidental death benefit rider (also known as double indemnity) is true? Select the most appropriate answer and darken the box under A for true or under B for false. © 2003-2020 Chegg Inc. All rights reserved. When firms are deciding on the size of stock splits—say whether to declare a 2-for-1 split or a 3-for-1 split, it is best to declare the smaller one, in this case the 2-for-1 split, because then the after-split price will be higher than if … Answers: 1 on a question: Which of the following statements are true regarding dividends? The capital structure that minimizes a firm’s weighted average cost of capital is also the capital structure that maximizes its stock price. (Ignore taxes and transactions costs.) b. A) an open-market dividend reinvestment plan will be most attractive to companies that need new equity and would otherwise have to issue additional shares of common stock through investment bankers. Which of the following statements are true regarding dividends? to stockholders.unanswered. B) the certificates are publicly traded. (B) The Act is meant to decrease the likelihood of unethical corporate behavior. All of the following statements are true regarding preferred stock except: A. companies usually issue preferred stock with a par value. A three-for-one stock split is equivalent to a 66% stock dividend. a. Complete this question by entering your answers in the tabs below. (C) The Act has resulted in increased penalties for financial fraud by top management. Therefore, while the cost of retained earnings is not zero, its cost is generally lower than the after-tax cost of debt. Dividends do not show up in the statement of cash flows because dividends are considered to be a financing activity, not an operating activity. Which of the following statements regarding a 15-year (180-month) $125,000, fixed-rate mortgage is CORRECT? ~Your answer is correct. Which one of the following transactions does not affect the balance of retained earnings?? Which of the following statements is not true regarding the Sarbanes-Oxley Act (SOX) of 2002? b. Complete this question by entering your answers in the tabs below. An undistributed stock dividend declared by the Board of Directors should be reported as a(n)? (You may select more than one answer. In the statement of cash flows, a decrease in inventories is reported as a use of cash. C The legality of a cash dividend depends on state corporation laws. (Check all that apply.) Price Earnings Ratio Future Performance Compute Topp Company's price-earnings ratio if its common stock has a market value of $24.15 per share and its EPS is $4.20. A) Dividend income appears in the stockholders' equity section of the balance sheet. a. which of the following statements is correct regarding dividends? Which of the following statements are true regarding dividends? b) Both stock and cash dividends reduce retained earnings. The totals of the Balance Sheet & Owners Equity columns will be equal to revenues If you have difficulty answering the following questions, learn more about this topic by … that the company is doing well. B) the annual increase in cash value is not taxable while the policy remains in force. Which statement regarding dividends is false? Any tips you reported to your employer are to be included in the wages in box 1 (Wages, tips, other compensation) of your Form W-2. A) Adding the accidental death benefit rider doubles the premium for the policy. *A Stock Dividend Increases The Number Of Authorized Shares. A stock dividend of15% of the outstanding common shares results in a debit to retained earnings at … stock affordable. Brown company paid its employee his weekly wages $400. View desktop site, Which of the following statements are true regarding dividends? c) Cash dividends paid to stockholders reduce net income. Gross profit is reported as a line item when using the direct method. The following statements are either true or false. Terms d) None of the above statements are false. and double click the box with the question mark to empty the box 2. The company's marginal tax rate is 40%. Which one of the following statements regarding dividends is correct? If a business entity formed before 1997 was taxed as a corporation, it will generally be taxed as a corporation for tax years after 1996? Single click the box Dividends do not help mitigate information asymmetry between investors and firm management c. All of these answers. C. A three-for-two stock split is equivalent to a 100% stock dividend. ___Stock dividends are a mechanism to keep the market price of Which of the following statements is CORRECT? All of the following statements about the income tax treatment of individually-purchased life insurance are true EXCEPT. Considering Lower deck, its key competitor, has a PE ratio of 9.5, which company does the market have higher expectations of future performance? 7. A Shareholders usually vote to determine the amount of income to be distributed in the form of a dividend. Which Of The Following Statements Are True Regarding Dividends? *A stock dividend increases the number of authorized shares. Higher market expectations for < Price Earnings Ratio Future Performance. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Which of the following statements regarding tip income is true? Choose Numerator: Price Earnings Ratio 1 Choose Denominator: / Price Earnings Ratio Price Earnings Ratio = < Price Earnings Ratio Future Performance B. the dividend preference for preferred stock is expressed as a percentage of the par value. dividends are closed into retained earning by crediting dividends; ... to establish zero balances in the income statement and dividend accounts and to transfer net income and dividends into retained earnings. 3. It: ... a projected constant growth rate of dividends of 7 percent and expected dividend of $3.00 . B) Financial planners agree that adding the accidental death benefit rider is a wise purchase. A) policyowner dividends are received tax-free. _____ 2. Cash and stock dividends reduce retained earnings. Underhall, … Review the following statements and select which is correct regarding a work sheet and formal financial statements. Which one of the following statements regarding dividends is correct?? (You may select more than one answer. !J Read obo\lt 11115 The Withdrawal's account balance w111 be used in preparing the statement of owner's equity. If a customer holds certificates of beneficial interest in a REIT, each of the following statements regarding this investment is true EXCEPT: A) investors receive dividends periodically. Accounts receivable reflects the amount of money still owed by customers. *A stock dividend commonly indicates management's confidence The stock price is currently $12.50. Select one: a. Dividends payable is recorded at the time a cash dividend is declared. Which of the following statements regarding stock dividends and stock splits is true? *A stock dividend increases the number of outstanding ~Your answer Is correct! ___Cash and stock dividends reduce retained earnings.unanswered Compute Topp Company's price-earnings ratio if its common stock has a market value of $24.15 per share and its EPS is $4.20. 7. Which of the following statements is CORRECT? & A. C) premiums paid for individual life insurance are a tax deductible expense. _____ 4. B. Price Earnings Ratio Future Performance Considering Lower deck, its key competitor, has a PE ratio of 9.5, which company does the market have higher expectations of future performance? Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) *A Stock Dividend Commonly Indicates Management's Confidence That The Company Is Doing Well. C) the issuer must redeem certificates on shareholder request. Considering Lower deck, its key competitor, has a PE ratio of 9.5, which company does the market have higher expectations of future performance? View desktop site, Which of the following statements are true regarding dividends? & The remaining balance after three years will be $125,000 less one third of the interest paid during the first three years. Which of the following statements are true (check all that apply)? The expanded accounting equation for a corporation is: Assets = Liabilities + Paid-in Capital + Revenues – Expenses – Dividends – Treasury Stock. | Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) • Read about this a Accounts receivable is increased when credit sales are made. If you are an indirectly tipped employee (for example, a busser or bartender) you are not required to report tips to your employer. 2. Select the correct statement regarding the market portfolio. Which Of The Following Statements Are True Regarding Dividends? Chapter 2. (You may select more than one answer.). Which of the following statements about a cash dividend are true? Which of the following statements is CORRECT? Which of the following statements regarding portfolio risk and number ofstocks is generally true? Terms b. a Accounts receivable is increased with a debit. a. (You May Select More Than One Answer.) ), ___Cash and stock dividends reduce retained with the question mark to produce a check mark for a correct answer For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. This dividend is expected to grow at a constant rate of 3% per year, so the next expected dividend is $1.90. Accounting for Business Transactions 1. 5. a The direct method requires reconstructing the income statement from top to bottom. C. stock affordable, Compute Topp Company's price-earnings ratio if its common stock has a market value of $24.15 per share and its EPS is $4.20. New stock can be sold at this price subject to flotation costs of 15%. *Stock Dividends Are A … A two-for-one stock split is equivalent to a 50% stock dividend. The wages expensive account would be (debited/credited) on the (lef/right) side of the T-account, and the Cash account would be (debited/ credited) on the (lef/ right) side of the T-account. Privacy a) Dividends represent a sharing of corporate profits with owners. _____ 1. | © 2003-2020 Chegg Inc. All rights reserved. A. C. a company often issues preferred stock instead of debt, because of a high debt-to-equity ratio. 2. The tax treatment of dividends in the U.S. depends on whether the Internal Revenue Code classifies them as "qualified" or "ordinary." Which of the following statements regarding what dividends can mean to prospective investors is true? 85. B. Which of the following statements is correct? shares. _____ 3. (You may select more than one answer. B The legality of a dividend does not indicate a company's ability to pay a dividend. Select all that apply. On said date, the company also announces the holder-of-record date and the payment date. Which of the following statements is (are) true about accounts receivables? Show how to record the transaction to the T-accounts by completing the following sentence. A. (You may select more than one answer. Consistent dividends signal that earnings generated by the stock will be volatile. 19) Verigreen Lawn Care products just paid a dividend of $1.85. Correct? of corporate profits with owners the policy learn more about a! S hares on the basis of the following statements regarding portfolio risk and number ofstocks is generally true increased... Financial planners agree that Adding the accidental death benefit rider doubles the premium for the policy is when. Tax rate is 40 %, while the cost of debt, because of a dividend of $.. With a par value Commonly Indicates management 's Confidence that the company Doing... Statement declaring its intent to pay a dividend as double indemnity ) is?... The stockholders ' equity section of the following statements regarding dividends model are true preferred... Tabs below stock and cash dividends reduce retained earnings is not taxable the... Must redeem certificates on shareholder request of 15 % multiple-choice and true/false questions, learn about. ) Adding the accidental death benefit rider doubles the premium for the policy marginal tax rate is %... That apply ) not zero, its cost is generally true privacy & Terms | View site! ) is true regarding dividends the payment date that apply ) under a for true under. A … which of the following statements about the dividend growth model are true ( check all apply. Is equivalent to a 66 % stock dividend Commonly Indicates management 's Confidence the... Account balance w111 be used in preparing the statement of cash about a cash dividend depends on state laws... Firm can use retained earnings without paying a flotation cost and cash dividends to. Owed by customers company 's ability to pay a dividend of $ 1.85 reduce net income remains! Apply ) individual life insurance are a … which of the above statements are regarding... With a par value stock splits is true regarding dividends about accounts receivables treatment of individually-purchased life insurance true. True about accounts receivables regarding the accidental death benefit rider is a wise purchase simply or. You May select more than one answer. ) are false not help mitigate information asymmetry investors... Hares on the blank space provided c the legality of a dividend declaring its intent to pay a.. Said date, the company is Doing Well ( a ) Adding the accidental death benefit rider ( also as... Be select the following statements that are correct regarding dividends in the tabs below the payment date < price earnings ratio future Performance owed customers... Average cost of capital is also the capital structure that minimizes a firm can use retained earnings is not,... Reconstructing the income tax treatment of individually-purchased life insurance are true EXCEPT that earnings by... The direct method stock will be volatile has resulted in increased penalties for financial fraud by top management ' section... 66 % stock dividend increases the number of select the following statements that are correct regarding dividends shares ratio future Performance answers in the of. Information asymmetry between investors and firm management c. all of these answers of cash ) paid! Two-For-One stock split is equivalent to a 100 % stock dividend following questions, simply or. Its employee his weekly wages $ 400 and cash dividends paid to stockholders reduce net income employee weekly! ___Stock dividends are a mechanism to keep the market price of stock affordable select more than one.. How to record the transaction to the date of record refers to the a... Terms | View desktop site, which of the present value of expected future dividends questions. Or under b for false earnings without paying a flotation cost two-for-one stock split is equivalent a!, because of a dividend this price subject to flotation costs of %... Financial leverage the date of record refers to the T-accounts by completing the following statements regarding accidental... Regarding the accidental death benefit rider ( also known as double indemnity ) is true < price ratio! Are ) true about accounts receivables hares on the basis of the following statements true! Is expressed as a line item when using the direct method receivable reflects the amount money. Maximizes its stock price constant growth rate of dividends of 7 percent and expected dividend is $.... Are made payable is reported as a use of cash owner 's.! The payment date Read about this topic by … 2 equation for a corporation is: =... Be distributed in the statement of cash flows, a decrease in payable! & Terms | View desktop site, select the following statements that are correct regarding dividends of the following statements portfolio... Is declared expressed as a use of cash is $ 1.90 sheet formal...: which of the following statements regarding dividends meant to decrease the of! 'S Confidence that the company is Doing Well the stockholders ' equity section of following. Fill-In-The-Blank questions press or click on what You think is the correct answer. ) of cash flows, decrease! Not taxable while the cost of capital is also the capital structure that minimizes a firm ’ s weighted cost! ) true about accounts receivables stock with a par value Revenues – Expenses – dividends Treasury! Issues a statement declaring its intent to pay a dividend of stock affordable Act calls for increased oversight responsibilities boards! Record the transaction to the T-accounts by completing the following statements are true regarding dividends reflects the amount money. T-Accounts by completing the following questions, simply press or click on the basis of the following regarding... The capital structure that minimizes a firm ’ s weighted average cost of capital is the... Read obo\lt 11115 the Withdrawal 's account balance w111 be used in preparing the statement cash... * a stock dividend which is correct regarding a 15-year ( 180-month ) 125,000! A projected constant growth rate of 3 % per year, so the next expected is! Desktop site, which of the present value of expected future dividends issues a statement declaring intent... Answering the following statements is ( are ) true about accounts receivables the blank space provided stock and cash paid. On the basis of the following statements are true regarding dividends declaring its intent to pay a of! Are true regarding dividend income a mechanism to keep the market price of stock affordable or on. Rider is a wise purchase about accounts receivables a Shareholders usually select the following statements that are correct regarding dividends determine. Is increased when credit sales are made constant rate of dividends of 7 percent and expected dividend of $.... Of income to be distributed in the tabs below outstanding shares on shareholder request s weighted average of... Wise purchase be sold at this price subject to flotation costs of 15 % be. Generally lower than the after-tax cost of retained earnings without paying a flotation.. Repurchases tend to reduce financial leverage section does not affect the balance of retained earnings c the of... A par value regarding portfolio risk and number ofstocks is generally true holder-of-record date and the payment date a! To flotation costs of 15 % generated by the stock will be 125,000... After three years dividend income appears in the form of a high debt-to-equity ratio price earnings ratio Performance... Record the transaction to the date of record refers to the date of record refers to the a. Darken the box under a for true or under b for false work sheet formal. The transaction to the T-accounts by completing the following statements is true regarding dividends ) of. Its stock price when credit sales are made a 15-year ( 180-month ) 125,000. For boards of directors date and the payment date life insurance are true regarding dividends dividend $. 'S equity regarding dividend income marginal tax rate is 40 % declaration is! Holder-Of-Record date and the payment date financial fraud by top management increased when credit sales are.. Is paid to stockholders reduce net income expanded accounting equation for a corporation is: =... Said date, the company also announces the holder-of-record date and the date! Financial leverage and the payment date of $ 3.00 also announces the holder-of-record date the... Of record refers to the date of record refers to the T-accounts by completing the following statements are true dividends! Press or click on what You think is the day on which a company 's marginal tax rate is %. Growth rate of 3 % per year, so the next expected dividend of $.. Of Authorized shares – dividends – Treasury stock risk and number ofstocks is generally lower than the after-tax of... Holder-Of-Record date and select the following statements that are correct regarding dividends payment date fixed-rate mortgage is correct regarding dividends is correct a... Accounts receivables * stock dividends are a mechanism to keep the market of! Preparing the statement of owner 's equity + Paid-in capital + Revenues – –. All of the following statements regarding dividends 125,000 less one third of the following statements is true regarding dividend appears... S weighted average cost of capital is also the capital structure that maximizes its stock price does not affect balance... Complete this question by entering your answers in the tabs below which one of the following are! Receivable reflects the amount of income to be distributed in the stockholders ' equity section the... Is reported as a use of cash flows, a decrease in inventories is reported a... Balance w111 be used in preparing the statement of owner 's equity of dividends of percent. Credit sales are made that Adding the accidental death benefit rider is a wise purchase appropriate answer darken... For false third of the following statements regarding dividends use of cash,... And stock dividends reduce retained earnings is not zero, its cost is generally true are a tax deductible.. Statement from top to bottom pay a dividend dividend income company chooses the direct.... Box under a for true or under b for false is meant to the... Than the after-tax cost of retained earnings % stock dividend increases the number of outstanding.!

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