Exam 11: Corporate Reporting and Analysis

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Question 131

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A proxy is:

A) A document that delegates a stockholder's voting rights to an agent.
B) A contractual commitment by an investor to purchase unissued shares of stock.
C) An amount of assets defined by state law that stockholders must invest and leave invested in a corporation.
D) The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation.
E) An arbitrary amount assigned to no-par stock by the corporation's board of directors.

F) B) and D)
G) B) and C)

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Question 132

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The stockholders' equity section of a company's year-end balance sheet follows: $\begin{array}{|l|r|r|} \hline \text { Preferred stock, \$ 50 par value, \( 9 \% \) cumulative and } &\\ \text { nonparticipating, 10,000 shares outstanding } &\$500,000\\ \hline\text { Paid-in capital in excess of par value, preferred stock } &50,000\\ \hline\text { Total capital paid-in by preferred stockholders. } &&\$550,000\\ \hline\text { Common stock, \( \$ 0.50 \) par value, \( 1,500,000 \) shares } &\\\text {outstanding } &\$750,000\\ \hline\text { Paid-in capital in excess of par value, common stock } &150,000\\ \hline\text {Total capital paid-in by common stockholders } &&900,000\\ \hline\text { Total paid-in capital} &&1,450,000\\ \hline\text {Retained earnings } &&1,690,000\\ \hline\text { Total stockholders' equity } &&\$3,140,000\\ \hline\end{array}$ The preferred stock has a call price of $51.50 per share plus dividends in arrears.Only one year of dividends is in arrears.Calculate the book value per (1)preferred share,and (2)common share.