1. The amount attributable to every share outstanding in case a corporation is liquidated.*

A. book value

B. par value

C. stated value

D. Market value

Option 5

2. ABC Co. has outstanding ordinary shares and nonparticipating, non-cumulative preferred shares. The liquidation value of the preferred shares is equal to its par value. The book value per ordinary share is unaffected by*

A. the declaration of a share dividend on preferred payable in preferred shares when the market price of the preferred is equal to its par value.

B. the declaration of a share dividend on ordinary shares payable in ordinary shares when the market price of the ordinary is equal to its par value.

C. the payment of a previously declared cash dividend on the ordinary share.

D. a 2-for-1 split of the ordinary share

3. S1: Noncumulative preference dividends in arrears are not paid and not disclosed. S2: Cumulative preference dividends in arrears should be reported thru a note disclosure.*

A. both are true

B. both are false

C. S1 is true

D. S2 is true

4. Which feature of preference shares would most likely be opposed by ordinary shareholders?*

A. callable

B. convertible

C. participating

D. redeemable

5. Book value per share is usually ______ the market value per share.*

A. equal to

B. less than

C. greater than

D. None of the above. It is equal to the par value per share.