Which of the Following Has an Effect on Total Stockholders

question 161

Multiple Choice

Which of the following has an effect on total stockholders' equity?

• A)Conversion of preferred stock into common stock
• B)Cash dividend
• C)Stock dividend
• D)Stock split

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Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, usually with fixed dividends.

Quarterly Dividend

A dividend payment made by a company to its shareholders every three months, representing a portion of the earnings.

Compounded Quarterly

A method of calculating interest where the interest earned on an investment is calculated four times a year and added to the principal sum, leading to interest calculations on interest in subsequent periods.

Future Value Factor

A formula used to determine the future value of an investment based on its current value and rate of return.