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When seeking long-term financing an advantage of issuing bonds over issuing common Stock is that stockholder control is not affected?
TRUE
Which of the following is not an advantage of issuing bonds instead of common stock?
Earnings per share on common stock are always lower.
What is one major expense associated with issuing new shares of common stock?
Underpricing is one major expense associated with issuing new shares of common stock.
What is the cost related to issuing new stock called?
The cost of issuing new stock is called "Share Issue Cost" or SIC. These costs are treated as an expense on the balance sheet.
What is the porpose of a company issuing stock?
Main purpose for issuing more stock is to get more cash to run the business and to invest in good opportunities or to fulfil the working capital requirements.
A big advantage of preferred stock is that preferred stock dividends are tax deductible for the issuing corporation?
Not in the US, anyhow.
When seeking long term financing an advantage of issuing bonds over issuing common stock is that stockholder control is not affected?
TRUE
When seeking long-term financing an advantage of issuing bonds over issuing common Stock is that stockholder control is not affected?
TRUE
Which of the following is not an advantage of issuing bonds instead of common stock?
Earnings per share on common stock are always lower.
What is an example of watered stock?
Watered stock is stock that is issued with a price that is much higher than the issuing company's assets. Watered stock can be stock that is overvalued due to excessive issuing or inflated accounting values.
What is one major expense associated with issuing new shares of common stock?
Underpricing is one major expense associated with issuing new shares of common stock.
What is the cost related to issuing new stock called?
The cost of issuing new stock is called "Share Issue Cost" or SIC. These costs are treated as an expense on the balance sheet.
What is the porpose of a company issuing stock?
Main purpose for issuing more stock is to get more cash to run the business and to invest in good opportunities or to fulfil the working capital requirements.
Whats is the Journal entery for costs of issuing stock?
Debit Capital stock xx Credit Cash xx Generally you would offset costs of issuing common or preferred stock against the similar equity account.
What is a business enterprise that raises money by issuing shares of stocks?
A business that raises money by issuing shares of stock?
How do corporations raise cash?
In addition to issuing bonds, corporations may borrow directly from any loan source, such as banks. On occasion, corporations raise needed cash by authorizing and selling additional stock.
Can common stocks become preferred stocks?
Yes if there is a clause while issuing common stock that stock holder can convert the common stock to preffered stock.
