BOOK VALUE PER SHARE

Question 1

The amount that would be paid on
each share assuming the entity is
liquidated and the amount available to
shareholders is exactly the amount
reported as shareholders’ equity.

Answer 1

Bookvalue per share

Question 2

Two classes of share capital, it is necessary to
apportion the shareholders equity between the
preference and ordinary shareholders:

Answer 2

Book value per preference share, ordinary share

Question 3

Any balance of the shareholders’ equity
in ____________of the par or stated value is
the apportioned taking into account the
liquidation value and dividend rights of
the preference shareholders

Answer 3

excess

Question 4

For book value purposes, the following are
assumed to be available for dividends:

Answer 4

Retained earnings, Share premium, Revaluation surplus

Question 5

For purposes of book value per share
computation, treasury shares shall be
treated as _________.

Answer 5

retired

Question 6

Any gain on retirement is credited to share
__________, and any loss on retirement is
charged first to share premium and then to
_________________.

Answer 6

premium, retained earnings

Question 7

In the absence of a liquidation value, the
preference shareholders shall receive an
amount equal to the ________________.

Answer 7

par value

Question 8

If there is deficit, the preference shareholders would share on a _____________with the ordinary shareholders

Answer 8

pro-rata basis

Question 9

A ___________ is the amount paid to
preference shareholders upon
redemption of preference share during
the lifetime of the corporation.

Answer 9

call price

Question 10

The preference shareholders are entitled
to payment not only for the liquidation
value but also for ____________ in arrear.

Answer 10

dividends

Question 11

If dividends are declared, the ______________
shareholders have the right to receive
dividends first before the ordinary
shareholders are paid a dividend.

Answer 11

preference

Question 12

In the absence of any statements to the
contrary, the preference share has
preference as to______________.

Answer 12

dividends

Question 13

• The right to receive dividends is forfeited in
  any one year in which the dividends are not
  declared
• Entitled only to current year dividends

Answer 13

Noncumulative preference share

Question 14

• Any undeclared dividends accumulate each
  year until paid
• Entitled to all dividends in arrear

Answer 14

Cumulative preference share

Question 15

• Entitled to receive only the dividends equal
  to the fixed rate

Answer 15

Nonparticipating preference share

Question 16

• Entitled to receive dividends in excess of
  basic or fixed rate:

 FULLY PARTICIPATING
 PARTICIPATING ONLY TO A CERTAIN
AMOUNT OR PERCENTAGE

− Ordinary share should receive first an amount
equal to the basic preference rate

Answer 16

Participating preference share

Question 17

Absence of specific designation: assumed
to be ________________ and _____________________.

Answer 17

noncumulative, nonparticipating

Question 18

Dividends in arrears, usually include
current dividends. Dividends in arrears in
prior years shall be specifically _____________,
otherwise, there are no arrearages.

Answer 18

disclosed

Question 19

In case where there are two classes of
preference shares with different rates and
both are participating, the _______ rate shall
be the basis for allocation to the ordinary
shares

Answer 19

lower