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Why is the cost of new common stock greater than the cost of retained earnings?
Wiki User
∙ 13y ago
it could be because issuing new shares in the market involves more cost such as flotation costs such as underwriting cost and the cost of having to under-price the stock so as to sell the issue.
Wiki User
∙ 13y ago
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Is this true or false - Treasury stock transactions never increase retained earnings or net income?
true. Treasury stock never affects Net Income. Treasury stock may decrease Retained earnings but it does not increase it.
Would a purchase of treasury stock affect retained earnings?
Answer:The purchase of treasury stock does not affect retained earnings. When the company owns treasury stock, then 'treasury stock' has a debit balance. It is nevertheless presented under equity, with a negative sign.(Technically, when a T-account switches from debit to credit - or the other way around - the sign flips.)Nevertheless, a subsequent sale of treasury stock can affect retained earnings when the amount received is below the cost (a loss is made). This loss is subtracted from retained earnings if there are no cumulative gains on prior sales of treasury stock.
Which of the following are income tax deductible items to a corporation Common stock dividends preffered stock dvidends retained earnings or Bond interest expenses?
Interest expenses are tax deductible.
What is retained earnings a asset?
When a company purchases stocks, it is shown as an investment on the Asset side of the Balance Sheet. However, if a company buys back its own stock, it is shown in the Retained Earnings section of the Balance Sheet as Treasury Stock.
How do you calculate stockholders equity?
You can get the Stockholders Equitys by finding out what the preffered and common stocks are at par value which is the minimum a company can issue their stocks for. Then figuring out the additional paid in capital which is the market price minus the par value for both the preffered and common stock. Once you find that, you add retained earnings. If the retained earnings is not given, then you take your net income minus dividends and treasury stock.
What is the similarity between retained earnings and common stock accounts?
which of the following describes the similarity between the retained earning, and common stock account?
What are the two parts of stockholder's equity in a corporations and indicate the purpose of each?
Stockholders' equity consists of two parts: common stock and retained earnings. Companies record as common stock the investments of assets into the business by the stockholders. They record as retained earnings the income retained for use in the business.
How do you calculate capital stock when you have assets liabilities and retained earnings?
Beg. Retained earnings + NI - Div Paid = Ending RE
Which of the following will not be shown on the retained earnings statement?
Stock dividends
Is this true or false - Treasury stock transactions never increase retained earnings or net income?
true. Treasury stock never affects Net Income. Treasury stock may decrease Retained earnings but it does not increase it.
The book value of the shareholders' ownership is represented by?
The sum of the par value of common stock, the capital surplus and the accumulated retained earnings.
Would a purchase of treasury stock affect retained earnings?
Answer:The purchase of treasury stock does not affect retained earnings. When the company owns treasury stock, then 'treasury stock' has a debit balance. It is nevertheless presented under equity, with a negative sign.(Technically, when a T-account switches from debit to credit - or the other way around - the sign flips.)Nevertheless, a subsequent sale of treasury stock can affect retained earnings when the amount received is below the cost (a loss is made). This loss is subtracted from retained earnings if there are no cumulative gains on prior sales of treasury stock.
What is the full form of KRE?
KRE stands for Cost of Retained Earnings or present common stock. It is one of the direct source of capital for any business.
Which of the following are income tax deductible items to a corporation Common stock dividends preffered stock dvidends retained earnings or Bond interest expenses?
Interest expenses are tax deductible.
What is retained earnings a asset?
When a company purchases stocks, it is shown as an investment on the Asset side of the Balance Sheet. However, if a company buys back its own stock, it is shown in the Retained Earnings section of the Balance Sheet as Treasury Stock.
What account is debited when a stock dividend is declared and distributed on the same date?
Retained earnings
How do you calculate stockholders equity?
You can get the Stockholders Equitys by finding out what the preffered and common stocks are at par value which is the minimum a company can issue their stocks for. Then figuring out the additional paid in capital which is the market price minus the par value for both the preffered and common stock. Once you find that, you add retained earnings. If the retained earnings is not given, then you take your net income minus dividends and treasury stock.
