Younger Company Has Outstanding Both Common Stock and Nonparticipating, Non-Cumulative

question 20

Multiple Choice

Younger Company has outstanding both common stock and nonparticipating, non-cumulative preferred stock. The liquidation value of the preferred is equal to its par value. The book value per share of the common stock is unaffected by

• A) the declaration of a stock dividend on preferred payable in preferred stock when the market price of the preferred is equal to its par value.
• B) the declaration of a stock dividend on common stock payable in common stock when the market price of the common is equal to its par value.
• C) the payment of a previously declared cash dividend on the common stock.
• D) a 2-for-1 split of the common stock.

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Definitions:

Economic Growth

A rise in the potential of an economy to output goods and services between one time frame and another.

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A situation characterized by a relatively slow rate of increase in the general price level of goods and services over a period of time.

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The influence that individuals exert on one another's behavior, choices, or performance in a social or work setting, often within similar age or professional groups.

Glee Club

A group of singers, often from a school or community, who perform together in unison or harmony.