11.Noncumulative preferred stock is entitled to all dividends, even if they are in the arrears.
12.Fully participating preferred shareholdersreceive extra dividends equally with therate ofcommon shareholders.
13.Companies can reacquire their own stock to reduce the likelihood of a hostile takeover.
14.Treasury stock does not vote, has no preemptive rights, cannot participate in dividends, and has no liquidation rights.
15.Contributed capital does not include subscribed stock because it has not been issued yet.
16.FASB requires companies to provide disclosure regarding the preferred stock characteristics.
17.The corporate form of organization is important to the U.S. economy because
a.there are more corporations than sole proprietorships.
b.there are more corporations than partnerships.
c.there are more sales of goods and services by corporations than anyother business forms.
d.corporations provide more donations to the economy than other business forms due to the many tax incentives geared toward corporations.
18.Universities, hospitals, and churches are examples of which type of corporation?
b.privately held companies
d.publicly held companies
19.Which of the following is not a characteristic of the corporate form of business entity?
a.It is a separate legal entity.
b.Owners have unlimited liability.
c.It has an indefinite life span.
d.Owners often are not an active part of management.
20.All of the following are true statements about a corporation except that it
a.must pay state and federal income taxes.
b.may engage in any legal activity.
c.can enter into legal contracts.
d.can continue in perpetuity.