The Annual Per Share Dividend Requirement of a 6%, $100

question 36

Multiple Choice

The annual per share dividend requirement of a 6%, $100 par value preferred stock that was issued for $105 is:

• A)$6.00
• B)$6.38
• C)$7.50
• D)$10.00

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Definitions:

Treasury Stock

Refers to shares that were issued and later reacquired by the issuing corporation, reducing the amount of outstanding stock on the open market.

Capital Gains

The increase in value of an asset or investment above its purchase price, realized upon the sale of the asset.

Treasury Stock

Treasury stock refers to shares that were once in circulation but have been bought back by the issuing company and held in its own treasury.

Contra

A term used in accounting to describe accounts that have an opposite effect on the account they are related to, used to reduce the balance of the original account.