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