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18 Cards in this Set
- Front
- Back
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Corporations are..
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an entity created by law that is separate from its owners. Corporations can be publicly or privately held.
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Publicly held:
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Offer their stock for public sale and can have thousands of shareholders.
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Privately Held:
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Do not offer stock for public and usually have few shareholders.
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Advantages of Corporate Form of Business:
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Separate legal entity, limited liability of stockholders, ease of transferability of ownership rights, lack of mutual agency of stockholders, ease of capital accumulation, and continuous life.
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Disadvantages of Corporate Form of Business:
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governmental regulation, corporate taxation.
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The term capital stock
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Refers to any shares issues (sold) to stockholders to obtain capital (money)
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Market value per share
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The price at which stock is bought or sold.
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Paid in..(or contributed capital)
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Total amount of cash and other assets received in exchange for stock.
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Issuing par value common stock-
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assigned a value per share by the corp in its charter. par value establishes minimum legal capital-least amount buyers must contribute to the corp.
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Issuing no par value stock-
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Stock not assigned a stated value in charter.
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Earnings per share (EPS)
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The amount of income earned per each share of company's outstanding common stock.
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Basic Earnings per share=
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Net Income-preferred dividends/weighted avg common shares outstanding.
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Cash Dividends important dates:
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Declaration, record, payment
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Declaration:
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date the board of directors votes to pay dividend; creates legal liability.
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Record:
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future date specified for identifying stockholders who will receive dividends.
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Payment-
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date dividends sent to stockholders of record.
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Stock Splits
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The distribution of additional shares of stock to stockholders based on number of shares owed.
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Treasury Stock
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A corporations own stock which they buy back.
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