Jack's by the Tracks Has the Following Partial Balance Sheet

question 162

Multiple Choice

Jack's by the Tracks has the following partial balance sheet: JACK'S BY THE TRACKS
Balance Sheet (partial)
$\begin{array}{lr}\text { Stockholders' Equity: } & \\\text { Common Stock } & \$ 6,000,000 \\\text { Retained Earnings } & 2,000,000 \\\text { Total Paid-in capital and retained earnings } & 8,000,000 \\\text { Add: Unrealized gain on available-for-sale securities } & 800,000 \\\text { Total Stockholders' Equity. } & \$ 8,800,000\end{array}$ What effect will the unrealized gain on available-for-sale securities have on comprehensive income?

• A) No effect on comprehensive income.
• B) Increase of $800,000 in comprehensive income.
• C) Increase of $8,800,000 in comprehensive income.
• D) Decrease of $800,000 in comprehensive income.

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Definitions:

Stock Market

A market in which shares of public companies are issued and traded, either through exchanges or over-the-counter markets.

Aggregate Earnings Multiplier

A valuation metric that compares the total market value of all companies in a sector to their aggregate earnings, often used to gauge sector valuation.

Constant Growth DDM

Dividend Discount Model assuming dividends grow at a constant rate indefinitely, used to estimate the value of a company's stock.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often receiving dividends before common shareholders and having priority in case of liquidation.