Investments Flashcards
1
Q
- What is redeemable preferred stock classed as for an investment?
A
A: debt investment
2
Q
- What is the formula to compute amortization?
A
Interest Revenue (carrying valueyield)
- State or Cash Interest (face valuestated rate)
= (+) number - discount
= (-) number - premium
3
Q
- how is a stock dividend recorded?
A
it is recorded as a memorandum entry to increase the # of shares owned. The cost of the investment does not change. the price per share (share cost) decreases.
