When a Corporation Issues Stock and Receives an Asset Other

question 95

True/False

When a corporation issues stock and receives an asset other than cash,the value of the asset received can create an ethical challenge.

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Definitions:

Stock Split

Current shareholders are given some number (or fraction) of shares for each share owned. Thus, in a three-for-one split, each shareholder would receive three new shares in exchange for each old share, thereby tripling the number of shares outstanding. Stock splits usually occur when the stock price is outside of the optimal trading range.

Shares

Units of ownership interest in a corporation or financial asset, providing an equal distribution in any profits, if any are declared, in the form of dividends.

Trades

The act of buying, selling, or exchanging financial instruments, commodities, or other tangible or intangible items between parties.

Dividends

Payments made by a corporation to its shareholders, often derived from the company's profits, and distributed on a regular basis.