FI 491 Lecture Notes - Lecture 34: Issued Shares, Stock Split, Preferred Stock
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Which one of the following statements about common stock is correct?
A. Firms tend to repurchase shares of their outstanding stock when they view the shares as undervalued. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. Treasury stock is a means of increasing the number of shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. Transaction costs cannot be expected to significantly reduce the rate of return on stock investments. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
D. Common stock gives stockholders first title to a share of the company's earnings, prior to other corporate obligations. ---- Tiffany owned 1000 shares of GIA stock which was selling for $1.50 per share when the company declared a 1 for 10 reverse split. After the split, Tiffany owned
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