Stockholders' Equity (Net Worth) is affected by all of the following EXCEPT:

A. declaration of a cash dividend

B. the purchase of Treasury stock

C. the issuance of new stock

D. declaration of a stock dividend

Answer: D. declaration of a stock dividend

A corporation buys furniture and fixtures, paying cash. Which of the following choices are affected?

I Current Assets

II Current Liabilities

III Net Worth

IV Net Working Capital

Answer: I and IV

A corporation would repurchase its debt for all of the following reasons EXCEPT to:

A. refinance at lower interest rates

B. increase its capitalization

C. increase the market value of its equity issues

D. reduce its sensitivity to earnings fluctuations due to cyclical conditions

Answer: B. Increase its capitalization

A corporation issues $100,000,000 of 10% convertible debentures, convertible at $50. Upon issuance, which of the following are affected?

I Total Assets

II Total Liabilities

III Net Working Capital

IV Stockholders' Equity

Answer: I, II, and III