BM 16T

A partner’s personal contribution in a business is equity capital.

• True

• False

Retained earnings are a type of equity capital.

• True

• False

Common stock is a type of security, but bonds are not.

• True

• False

Preferred stockholders usually have voting privileges at the stockholders’ meetings.

• True

• False

When a corporation ceases operations, preferred and common stockholders usually get all their investment back from the sale of the assets.

• True

• False

The book value of a share of stock is found by dividing the corporation’s net worth by the total number of shares outstanding.

• True

• False

If the par value of a share of stock is $100, the market value cannot be below $100.

• True

• False

Even if a business is not making a profit, it should plan to replace assets that depreciate.

• True

• False

A supplier who allows a business 90 days to pay for merchandise is actually providing short-term capital.

• True

• False

If a business has a $50,000 open line of credit, it can borrow a minimum of $50,000 at a time.

• True

• False