Question : 19.1   Learning Objective 19-1 1) Market Value defined as: A) the price : 1171127

19.1   Learning Objective 19-1

1) Market Value is defined as:

A) the price a corporation pays when it reserves the right to retire or redeem stock at a specific price.

B) the price at which shares are bought and sold on the open market.

C) the total stockholders’ equity minus total amount assigned to preferred stock

D) the total of stockholders’ equity (when only common stock exists) divided by the number of shares issued.

2) Book Value per Share is defined as:

A) the price a corporation pays when it reserves the right to retire or redeem stock at a specific price.

B) the price at which shares are bought and sold on the open market.

C) the total stockholders’ equity minus total amount assigned to preferred stock.

D) the total of stockholders’ equity (when only common stock exists) divided by the number of shares issued.

3) Redemption Value is defined as:

A) the price a corporation pays when it reserves the right to retire or redeem stock at a specific price.

B) the price at which shares are bought and sold on the open market.

C) the total stockholders’ equity minus total amount assigned to preferred stock.

D) the total of stockholders’ equity (when only common stock exists) divided by the number of shares issued.

4) When the corporation has both preferred and common stock, the steps to compute book value for common stock would be:

A) compute common shares divided by number of shares outstanding.

B) compute preferred stock book value first; the remainder is assigned to common stock.

C) divide total stockholders’ equity by total shares outstanding.

D) None of these answers is correct.

5) If total stockholders’ equity is $120,000 with 8,000 common shares outstanding, what is the book value per share of common stock? (Assume no preferred stock is outstanding)

A) $18.00

B) $45.00

C) $15.00

D) $12.00

6) What is the book value per share of common stock if total stockholders’ equity is $800,000 with 20,000 shares of common stock outstanding? (Assume no preferred stock is outstanding)

A) $40.00

B) $4.00

C) $400.00

D) $20.00

7) Total stockholders’ equity consists of retained earnings of $100,000 and paid-in capital of $500,000. There are 30,000 common shares outstanding, and no preferred shares outstanding. What is the book value per share of common stock?

A) $20.00 per share

B) $25.00 per share

C) $15.00 per share

D) $ 5.00 per share

8) Dexter Corporation has total paid-in capital of $140,000 and retained earnings of $90,000. It has 2,000 shares of $10 preferred stock outstanding with no dividends in arrears and 4,000 shares of $10 par value common stock outstanding. The book value of each share of common stock is:

A) $52.50.

B) $5.25.

C) $57.50.

D) $38.33.

9) Patterson Research has 200 shares of 10%, $100 par value, preferred stock, and 2000 shares of $10 par value common stock outstanding. Total paid-in capital is $42,000, and retained earnings are $0. There are one-year dividends in arrears on preferred stock. The book value per share on common stock is:

A) $10.

B) $40.

C) $20.

D) $9.

10) Ariel Investigations has total paid-in capital of $70,000 and retained earnings of $40,000. It has 100 shares of $100 par value common stock outstanding, and no preferred shares outstanding.. The book value of each share of common stock is:

A) $400

B) $700.

C) $1,100.

D) $1,000