The Charter of a Corporation Provides for the Issuance of 100,000

question 56

Multiple Choice

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2-per-share dividend is declared?

• A) $80,000
• B) $10,000
• C) $90,000
• D) $100,00

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Definitions:

Face Value

The nominal or dollar value printed on a bond or other financial instrument, representing the amount to be repaid at maturity.

Municipal Bond

A debt security issued by a state, municipality, or county to finance its capital expenditures.

Corporate Bond

A debt security issued by a corporation to raise capital, whereby the issuer promises to repay the principal along with interest at specified dates.

Tax Bracket

A range of incomes taxed at a specific rate, with different portions of income being taxed at progressively higher rates as income increases.