Exam 12: Organization and Operation of Corporations

For preferred shares to increase the return earned by common shareholders, the preferred dividend rate as a percentage of the capital raised must be:

The costs of bringing a corporation into existence, including legal fees, promoters' fees, and amounts paid to the government are called:

An underwriter keeps shareholder records and prepares official lists of shareholders and dividend payments.

If a corporation that has only one class of shares, or if there is more than one class, the class that has no preference over the other classes of shares, is called:

Corporations can be either public or limited.

One of the preference rights for preferred shares is the right to vote.

Common shares usually carry a preference for dividends.

Legal costs incurred to get a corporation up and running should be accounted for by debiting:

A proxy is:

A new corporation ended its first year of operations with assets of $100,000, liabilities of $75,000, and contributed capital common shares) of $10,000. What was thecorporation's profit for the year?

The type of share that can be bought back by the company at a specified time and price is:

Corporations issue preferred shares in order to raise capital without sacrificing control of the corporation and to increase the return earned by common shareholders.

Whether a business is organized as a corporation or as a proprietorship, the profit reported on the income statement will be the same.

The total amount of cash and other assets received by a corporation from its shareholders in exchange for common shares is included in:

Tech Inc's board of directors voted to declare a common cash dividend of $.0.75 per share. The company has 15,000 common shares authorized, with 10,000 issued and outstanding. The amount of the dividend is:

Preferred shares are seen by some investors as being less risky and having a greater dividend rate than common shares.

When preferred shares are issued, this will always cause an increase in the future return to common shareholders.

Zach Sports Ltd has 1,000 shares of $5.50, cumulative preferred shares and 10,000common shares issued and outstanding. In the previous year which was the first year of operations), the company paid total dividends of $1,000. The amount that must be paid to the preferred shareholders in the current year before any dividend is paid to common shareholders is:

Unpaid preferred dividends are called dividends in arrears.

The date of record is the date the directors vote to pay a dividend to shareholders.