Which statement below is not a reason for a corporation to buy back its own stock. a. for supporting the market price of the stock b. bonus to employees c. to increase the shares outstanding d. resale to employees Significant changes in stockholders’ equity are reported in a. retained earnings statement b. statement of cash flows c. statement of stockholders’ equity d. income statement One potential advantage of financing corporations through the use of bonds rather than common stock is a. the interest on bonds must be paid when due b. the corporation must pay the bonds at maturity c. the interest expense is deductible for tax purposes by the corporation d. a higher earnings per share is guaranteed for existing common shareholders Stockholders’ equity a. includes paid-in capital and liabilities b. includes retained earnings and paid-in capital c. is usually equal to cash on hand d. is shown on the income statement. The interest rate specified in the bond indenture is called the a. contract rate b. market rate c. discount rate d. effective rate When the market rate of interest was 12%, Halprin Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was a. $321,970 b. $1,000,000 c. $943,494 d. $621,524 When the corporation issuing the bonds has the right to the repurchase the bonds prior to the maturity date for a specific price, the bonds are a. unsecured bonds b. callable bonds c. convertible bonds d. debenture bonds The market interest rate related to a bond is also called the a. stated interest rate b. straight-line rate c. contract interest rate d. effective interest rate

Which statement below is not a reason for a corporation to buy back its own stock. a. for supporting the market price of the stock b. bonus to employees c. to increase the shares outstanding d. resale to employees Significant changes in stockholders’ equity are reported in a. retained earnings statement b. statement of cash flows c. statement of stockholders’ equity d. income statement One potential advantage of financing corporations through the use of bonds rather than common stock is a. the interest on bonds must be paid when due b. the corporation must pay the bonds at maturity c. the interest expense is deductible for tax purposes by the corporation d. a higher earnings per share is guaranteed for existing common shareholders Stockholders’ equity a. includes paid-in capital and liabilities b. includes retained earnings and paid-in capital c. is usually equal to cash on hand d. is shown on the income statement. The interest rate specified in the bond indenture is called the a. contract rate b. market rate c. discount rate d. effective rate When the market rate of interest was 12%, Halprin Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was a. $321,970 b. $1,000,000 c. $943,494 d. $621,524 When the corporation issuing the bonds has the right to the repurchase the bonds prior to the maturity date for a specific price, the bonds are a. unsecured bonds b. callable bonds c. convertible bonds d. debenture bonds The market interest rate related to a bond is also called the a. stated interest rate b. straight-line rate c. contract interest rate d. effective interest rate