On July 1, year 1, Alto Corp split its common stock 5-for-1 when the market value was $100. Prior to the split, Alto had 10,000 shares of $10 par value common stock issued and outstanding. After the split, the par value of the stock
Ah we are of like minds my friend. That was my guess too, but in actuality when a stock split is issued the TOTAL par value remains the same so that would be $100,000, but now there are 50,000 shares so each share has a par value of $2.
Kent, Inc has been forced into bankruptcy and has begun to liquidate. Unsecured claims will be paid at the rate of 40 cents on the dollar. Apex Co. holds a non-interest bearing note receivable from Kent in the amount of $100,000, collateralized by machinery with a liquidation value of $25,000. The total amount to be realized by Apex on this note receivable is:
A company wishes to raise funds by issuing either bonds or cumulative preferred stock. How will the annual interest or dividend affect total liabilities each year?
A. Both interest and cumulative preferred dividends are current liabilities each year (until paid)
B. Interest is a current liability each year (until paid)
C. Interest and cumulative preferred dividends in arrears are current liabilities each year (until paid)
D. Cumulative preferred dividends are a current liability each year (until paid)
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