Which of the Following Statements About a Bonus Issue Is

question 18

Multiple Choice

Which of the following statements about a bonus issue is NOT true?

• A) Shareholders will only gain if the market value of the combined shares is greater than it was before the bonus issue.
• B) Total shareholders' equity remains constant.
• C) Net assets increase.
• D) If a shareholder owned 10 per cent of the company before the bonus issue, she or he would still own 10 per cent after the bonus issue.

Recognize the importance and implications of certifications such as Certified Public Accountant (CPA) and their rights to express opinions on financial statements.

Identify key legislation affecting accounting practices, such as the Sarbanes-Oxley Act.

Know the terminology and processes within accounting, including bookkeeping, the accounting cycle, and fundamental equations.

Differentiate between various types of accounting and their specific functions, such as financial, management, operational, and tax accounting.

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Definitions:

Coupon Rate

A bond's yearly interest payout rate, described as a percentage of its face value.

Coupon Rate

The annual interest rate paid on a bond's face value, indicating the amount of periodic payments to the bondholder.

TIPS Bond

Treasury Inflation-Protected Securities are U.S. government bonds that are indexed to inflation in order to protect investors from the negative effects of rising prices.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which does not necessarily reflect its market value.