Hamilton Ltd

question 129

Multiple Choice

Hamilton Ltd. has both common shares and non-participating, noncumulative preferred shares outstanding. The book value per common share is NOT affected by

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

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Definitions:

Gift

A voluntary transfer of property or funds from one person to another without receiving anything in return, or at least without expecting a return equal to the value of the gift.

Short-Term Capital Loss

A financial loss realized on the sale of securities or assets held for one year or less, which can be used to offset capital gains for tax purposes.

Long-Term Capital Gain

The profit from the sale of an asset held for more than a year, generally taxed at a lower rate than short-term gains.

AGI

Adjusted Gross Income, the total income minus specific deductions, serving as a basis for calculating taxable income and certain tax credits.