Chapter 15 Homework - C hapter 15: Stockholders Equity...

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Chapter 15: Stockholders’ Equity Tiffany Watt Homework February 7, 2011 AC 302 – 01 Questions 1) In the absence of restrictive provisions, what are the basic rights of stockholders of a corporation? In the absence of restrictive provisions, each share carries the following rights: a. To share proportionately in profits and losses. b. To share proportionately in management (the right to vote for directors). c. To share proportionately in corporate assets upon liquidation. d. To share proportionately in any new issues of stock of the same class – called the preemptive right. 11) For what reasons might a corporation purchase its own stock? A corporation might purchase its own stock for five main reasons: (1) to provide tax-efficient distributions of excess cash to shareholders, (2) to increase earnings per share and return on equity, (3) to provide stock for employee stock compensation, contracts or to meet potential merger needs, (4) to thwart takeover attempts or to reduce the number of stockholders, and
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This note was uploaded on 09/01/2011 for the course BUSINESS 101 taught by Professor - during the Spring '11 term at Mississippi Valley State University.

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Chapter 15 Homework - C hapter 15: Stockholders Equity...

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