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40 Cards in this Set

  • Front
  • Back
Authorized stock
The number of shares of stock that a corporation's charter allows it to sell.
Stock dividend
A corporation's distribution of its own stock to its stockholders without the receipt of any payment.
Minimum legal capital
The least amount that buyers of stock must contribute to the corporation or be subject to paying at a future date
Preemptive right
The right of common stockholders to maintain their proportionate interest in a corporation by having the first opportunity to buy additional proportionate shares of stock issued
No-par value stock
A class of stock that has not been assigned a par value by the corporate charter.
Organization expenses
The costs of bringing a corporation into existence that include legal fees, promoters' fees, and amounts paid to obtain a charter.
Common stock
The basic stock of a corporation that usually carries voting rights for controlling the corporation.
Convertible preferred stock
Preferred stock giving the holder the option of exchanging it for common stock at a specified rate.
Statutory restriction
A limit on treasury stock purchases to the amount of retained earnings.
Callable preferred stock
Preferred stock that gives the issuing corporation the right to purchase or retire it at specified future prices and dates.
Earnings per share
Income earned by each share of a company's outstanding common stock.
Statement of stockholders' equity
A financial statement that lists the beginning and ending balances of each equity account and describes the changes in these accounts during the period.
Large stock dividend
A stock dividend that is more than 25% of the previously outstanding shares.
Date of declaration
The date a corporation's directors vote to issue a dividend
Change in accounting estimate
Corrections to previous estimates of future events and outcomes accounted for in current and future periods.
Paid-in Capita
The total amount of cash and other assets a corporation receives from its stockholders in exchange for its stock.
Nonparticipating preferred stock
A feature that limits dividends to a maximum amount each year regardless of excess dividends declared
Treasury stock
A corporation's own stock that was reacquired and is still held by the corporation.
Prior period adjustment
A correction of an error in a prior year that is reported in the statement of retained earnings or changes in stockholders' equity net of any income tax effects
Deficit
An abnormal debit balance in retained earnings.
Stated value stock
No-par stock to which the directors assign a stated value per share; this amount becomes the minimum legal capital.
Call price
The amount that must be paid to call and retire a preferred share
Stockholders' equity
The equity of a corporation.
Market value per share
The price at which stock is bought or sold in the market.
Financial leverage
The earning of a higher return on common stock by paying dividends on preferred stock or interest on debt at a rate that is less than the rate of return earned with the assets from issuing preferred stock or debt
Book value per common share
Stockholders equity applicable to common shares divided by the number of common shares outstanding
Par value
The value assigned to a share of stock by the corporate charter when the stock is authorized.
Premium on stock
The difference between the par value of stock and its issue price when it is issued at a price above par value.
Preferred stock
Stock that gives its owners a priority status over common stockholders in one or more ways, such as the payment of dividends or the distribution of assets
Cumulative preferred stock
A preferred stock that has the right to be paid both the current and all prior periods' unpaid dividend before any dividend is paid to common stockholders.
Price-earnings ratio
The ratio of a company's current market value per share to its earnings per share.
Date of record
The date specified by directors of a corporation for identifying stockholders to receive dividends
Reverse stock split
Occurs when a corporation calls its stock and replaces each share with less than one new share; increases both the market value per share and the par or stated value per share.
Dividend yield
A ratio of the annual amount of cash dividends distributed to common shareholders relative to the stock's market value.
Transfer agent
A bank or trust company that assists with purchases and sales of shares by receiving and issuing certificates as necessary.
Basic earnings per share
Net income less preferred dividends divided by weighted-average common shares outstanding.
Appropriated retained earnings
Retained earnings reported separately as a way to inform stockholders of funding needs.
Stock split
Occurs when a corporation calls in its stock and replaces each share with more than one new share; decreases both the market value per share and the par or stated value per share.
Proxy
A document that gives a designated agent the right to vote a stockholder's stock.
Small stock dividend
A stock dividend that is 25% or less of the previously outstanding shares.