Question Details

cumulative effect of the declaration and payment of a cash



1.	Which of the following statements about dividends is not accurate?
a.	Many companies declare and pay cash quarterly dividends.
b.	Low dividends may mean high stock returns.
c.	The board of directors is obligated to declare dividends.
d.	A legal dividend may not be a feasible one.


	2.	The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to
a.	decrease current liabilities and stockholders' equity.
b.	increase total assets and stockholders' equity.
c.	increase current liabilities and stockholders' equity.
d.	decrease stockholders' equity and total assets.


	3.	The declaration and distribution of a stock dividend will
a.	increase total stockholders' equity.
b.	increase total assets.
c.	decrease total assets.
d.	have no effect on total assets.


	4.	Xeris, Inc. has 1,000 shares of 5%, $10 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2013. What is the annual dividend on the preferred stock?
a.	$5 per share
b.	$500 in total
c.	$5,000 in total
d.	$.05 per share



	5.	Win, Inc. has 10,000 shares of 7%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2013. If the board of directors declares a $60,000 dividend, the
a.	preferred shareholders will receive 1/10th of what the common shareholders will receive.
b.	preferred shareholders will receive the entire $60,000.
c.	$60,000 will be held as restricted retained earnings and paid out at some future date.
d.	preferred shareholders will receive $30,000 and the common shareholders will receive $30,000.




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