cash dividend becomes a binding legal obligation 1. The purchase of treasury stock a. decreases common stock authorized. b. decreases common stock issued. c. decreases common stock outstanding. d. has no effect on common stock outstanding. 2. Preferred stockholders have a priority over common stockholders as to a. dividends only. b. assets in the event of liquidation only. c. voting rights. d. both dividends and assets in the event of liquidation. 3. On January 2, 2010, Porter Corporation issued 30,000 shares of 6% cumulative preferred stock at $100 par value. On December 31, 2013, Porter Corporation declared and paid its first dividend. What dividends are the preferred stockholders entitled to receive in the current year before any distribution is made to common stockholders? a. $0 b. $180,000 c. $540,000 d. $720,000 4. Which of the following statements about a cash dividend is incorrect? a. The legality of a cash dividend depends on state corporation laws. b. The legality of a dividend does not indicate a company’s ability to pay a dividend. c. Dividends are not a liability until declared. d. Shareholders usually vote to determine the amount of income to be distributed in the form of a dividend. 5. The date a cash dividend becomes a binding legal obligation to a corporation is the a. declaration date. b. earnings date. c. payment date. d. record date. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help
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