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Match the Term and the Definition

Question 125

Matching

Match the term and the definition.Not all definitions will be used.

Premises:
Outstanding shares
ROE
Stock dividend
Diluted EPS
Residual claim
Cash dividend
EPS
Treasury shares
IPO
Preferred shares
Responses:
The shares of stock repurchased by the issuing company.
Shares of stock that pay a fixed dividend rate but have no voting rights.
This payment lowers shareholders' equity.
Shareholders' entitlement to remaining assets after creditors are repaid.
Earnings per share that reflects treasury and preferred shares.
This payment raises shareholders' equity.
Earnings per share that reflects obligations involving potential new stock issuances.
Net income divided by the average number of outstanding common shares.
Stock that allows holders to be listed among creditors.
A measure of the return on individual shareholders' purchases of shares.
Net income divided by average shareholders' equity.
Shares of companies with high EPS and ROE: they tend to be expensive.
Also known as income per output; net income divided by units sold.
When a company first starts selling shares to the public.
This dividend does not reduce shareholders' equity.
The shares of stock held by shareholders.
The additional shares of stock a company can issue beyond what are already issued.

Correct Answer:

The shares of stock repurchased by the issuing company.
Shares of stock that pay a fixed dividend rate but have no voting rights.
This payment lowers shareholders' equity.
Shareholders' entitlement to remaining assets after creditors are repaid.
Earnings per share that reflects treasury and preferred shares.
This payment raises shareholders' equity.
Earnings per share that reflects obligations involving potential new stock issuances.
Net income divided by the average number of outstanding common shares.
Stock that allows holders to be listed among creditors.
A measure of the return on individual shareholders' purchases of shares.
Net income divided by average shareholders' equity.
Shares of companies with high EPS and ROE: they tend to be expensive.
Also known as income per output; net income divided by units sold.
When a company first starts selling shares to the public.
This dividend does not reduce shareholders' equity.
The shares of stock held by shareholders.
The additional shares of stock a company can issue beyond what are already issued.
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