Why might a board of directors voluntarily restrict its dividend-declaring power?
Answer to relevant QuestionsYour friend has decided that par value of common stock is a meaningless notion and complicates accounting practice without adding value to the financial statements. How do you respond? “Gains and losses are not possible from a corporation acquiring or selling its own stock.” Do you agree? Explain.Your friend has developed a stock investing strategy that suggests you should always buy the shares of companies when they split their stock or issue large stock dividends. How do you respond? An annual report of Pacific Foods Company included the following in the statement of consolidated retained earnings: Charge for stock split ......... $4,401,000 The balance sheets before and after the split showed the ...Yanity Interiors, Inc., maker of seats and other interior equipment for Boeing aircraft, started 20X8 with the following balance sheet:6% Cumulative convertible preferred stock, par value $10 a share, authorized 150,000 ...
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