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Unformatted text preview: Final Exam 60 multiple choice questions Chapter 10 - 2 Questions on Theory If bonds issued are greater than market rate, then there is a premium at more maturity If bonds issued are lower than market rate, then there is a discount at less maturity Par value no discount or premium, it is issued at market rate Principle or maturity value is the amount the borrower must pay back to the bondholder Term bonds mature same date Serial bonds mature in installments Secured if interest is not paid, bondholder has right to assets Debenture - unsecured, not backed by assets Convertible bonds bonds that may be converted into common stock Bonds must pay interest, reduces net income, can increase earnings per share Stock dont have to pay off, doesnt affect net income, increases number of outstanding shares Chapter 11 - 5 Questions on Theory and calculations Paid in Capital amounts received from stockholders, common stock is main source Retained Earnings internal generated from profitable operations Common basic form of stock Preferred Stock receive dividends and assets before CS, no right to vote Preferred Stock par value per share = preferred stock # of shares issued Preferred Stock dividend = preferred stock shares x par value X dividend rate Common Stock dividend = total dividend (PS issued) preferred stock dividend Paid in Capital = (shares x price per share) shares Total Paid in Capital = PS + CS + Additional Paid in Capital Common Equity = Total Stockholders equity Preferred Equity Preferred equity = Par value of stock + preferred dividends Book value per share = Common equity common shares outstanding...
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