Midterm Exam 2 F09

Midterm Exam 2 F09 - Name Section: Midterm 2 Management 351...

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Name Section: Midterm 2 Management 351 Fall 2009 1. This exam consists of multiple choice items and numerical problems (with several parts each). The exam is 10 pages plus this cover page. Please check to see that your exam document is complete. The point value for each type of problem is: A. MULTIPLE CHOICE 30 points B. NUMERICAL PROBLEMS 120 points TOTAL POINTS 150 points 2. You have 1.5 hours to complete this exam. At the end of the 90 minutes, please give me your exam document. It is important that all students cooperate in promptly turning in the exams to insure that no student has any advantage over another. 3. This exam is closed book, closed notes, no laptop--you may use your own calculator. 4. Show all of your calculations when solving numerical and essay problems. Correct answers to numerical and essay problems which are not accompanied by work indicating how the answer was derived will not receive any credit. Even if the answer can be computed in your head, indicate your thought process on paper. Partial credit will be given only where the logic and handwriting can be easily followed . 5. If you think that an additional assumption is necessary to complete a problem, clearly state your extra assumption and continue working the problem. As long as your assumption does not contradict information in the problem and is plausible/justifiable, your answer will be graded using that assumption. 6. If you have a question, please come and ask me
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A. (30 points) MULTIPLE CHOICE ITEMS 1. In January 2007, Castro Corporation, a newly formed company, issued 10,000 shares of its $10 par common stock for $15 per share. On July 1, 2007, Castro Corporation reacquired 1,000 shares of its outstanding stock for $12 per share. The acquisition of these treasury shares a. decreased total stockholders' equity. b. increased total stockholders' equity. c. did not change total stockholders' equity. d. decreased the number of issued shares. 2. The cumulative feature of preferred stock a. limits the amount of cumulative dividends to the par value of the preferred stock. b. requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. c. means that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock. d. enables a preferred stockholder to accumulate dividends until they equal the par value of the stock and receive the stock in place of the cash dividends. 3. A dividend which is a return to stockholders of a portion of their original investments is a a. property dividend. b. liability dividend. c. participating dividend. d.
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Midterm Exam 2 F09 - Name Section: Midterm 2 Management 351...

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