1) At the beginning of the current year, Omar Company declared a1 for 5 reverse stock split, when the market value per share was$10. Prior to the split, Omar had 100,000 shares issued andoutstanding. After the split, what is the market value of theshares? Select one:
a. 10
b. 20
c. 50
d. 2
2) How would retained earnings be affected by the declaration ofcash dividends – common and stock dividends? Select one:
a. Component of shareholders’ equity as part of totalshareholders’ equity
b. Component of total liabilities as current liability
c. Component of total liabilities as noncurrent liability
d. Component of equity as part of share premium
3) What information is typically included in the shareholders’equity of a public corporation’s balance sheet?
i - Number of shares authorized ii - Number of shares issued iii- Number of shares outstanding iv – Number of shares held by eachshareholder Select one:
a. all of i, ii, iii, and iv
b. i and ii only
c. i and iv only
d. i, ii, and iii only
4) A liquidating dividend: Select one:
a. Forces to corporation to downsize its operations
b. Uses paid-in capital to pay dividends
c. Forces shareholders to sell their shares for cash
d. Forces the issuer to repurchase shares for cash Forces tocorporation to downsize its operations
5) How would retained earnings be affected by the declaration ofcash dividends – common and stock dividends? Select one:
a. Decrease and Decrease
b. No effect and No effect
c. Decrease and No effect
d. No effect and Decrease
