The book value of one share of callable preferred stock is equal to the call value of the preferred share minus any dividends in arrears
Indicate whether the statement is true or false
False
You might also like to view...
Price and profit allocation decisions are usually best made:
A. cooperatively by both subsidiary and IC headquarters. B. at the subsidiary headquarters in the host country with the lowest prices. C. at the subsidiary headquarters. D. at the IC headquarters.
Though focus on quality is considered a modern management issue, the Deming Application Prize actually originated in 1951
Indicate whether the statement is true or false
Two operationally similar companies, HD and LD, have identical amounts of assets, operating income (EBIT), tax rates, and business risk. Company HD, however, has a much higher debt ratio than LD. Company HD's return on invested capital (ROIC) exceeds its after-tax cost of debt, (1-T) rd. Which of the following statements is CORRECT?
A. Company HD has a higher times interest earned (TIE) ratio than Company LD. B. Company HD has a higher return on equity (ROE) than Company LD, and its risk, as measured by the standard deviation of ROE, is also higher than LD's. C. The two companies have the same ROE. D. Company HD's ROE would be higher if it had no debt. E. Company HD has a higher return on assets (ROA) than Company LD.
Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paidyear 1$20,000year 2$6,000year 3$32,000The amount of dividends paid to preferred and common shareholders in year 1 is:
A. $4,000 preferred; $16,000 common. B. $200 preferred; $19,800 common. C. $20,000 preferred; $0 common. D. $17,000 preferred; $3,000 common. E. $10,000 preferred; $10,000 common.