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Unformatted text preview: ch14 Student: _______________________________________________________________________________________ Multiple Choice Questions 1. A stock certificate often has a stated value on it. This amount is the: A. book value. B. stated book value. C. subordinated liquidation value. D. par value. E. None of the above. 2. The dedicated capital of a corporation is determined by: A. the sum of the capital in excess of par and the retained earnings. B. the par value of preferred stock. C. the sum of the treasury stock and the preferred stock. D. the number of shares issued multiplied by the par value of each share. E. the market price of company's debt. 3. Capital surplus usually refers to: A. the stock's par value. B. last year's retained earnings. C. book value per share. D. the amount of directly contributed equity capital in excess of par value. E. treasury stock. 4. The articles of incorporation state the number of shares that may be issued. The corporation: A. must issue all authorized shares. B. is unlimited in the number of authorized shares that it may have. C. needs only board approval to issue authorized shares. D. Both A and B. E. Both B and C. 5. Retained earnings are: A. the amount of cash that the firm has saved up. B. the difference between the net income earned and the dividends paid. C. the difference between the market price of the stock and the book value. D. the amount of stock repurchased. E. None of the above. 6. The book value of the shareholders' ownership is represented by: A. the sum of the par value of common stock, the capital surplus and the accumulated retained earnings. B. the total assets minus the net worth. C. the sum of the preferred stock, debt and the capital surplus. D. the sum of the total assets minus the current liabilities. E. None of the above. 7. Shares of stock that have been repurchased by the corporation are called: A. treasury stock. B. undistributed capital stock. C. retained equity. D. capital surplus shares. E. None of the above. 8. The market value of the ownership of the firm equals: A. the market price of the stock times the number of shares outstanding. B. the sum of the market price of the bonds and the stock. C. the par value of the stock times the number of shares outstanding. D. the market price of the stock minus the retained earnings. E. None of the above. 9. A grant of authority allowing someone else to vote shares of stock that you own is called: A. a power-of-share authorization. B. a proxy. C. a share authority grant (SAG). D. a restricted conveyance. E. None of the above. 10. Unsecured corporate debt is called a(n): A. indenture. B. debenture. C. bond. D. mortgage. E. None of the above. 11. Paying off long-term debt by making installment payments is called: A. foreclosing on the debt....
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- Spring '11
- Corporate Finance, Difficulty level