Stock

Front 1

A company issues ____ as its primary means of raising business capital

Back 1

Stock

Front 2

Whatever a business owns (its ____) less its creditors' claims (its _____) belongs to the business owners (its _____).

Back 2

Assets, Liabilities, Stockholders

Front 3

By electing a BOD (_____ ___ ____) stock holders have some say in the company's management but are not involved in the day-day details of its operations.

Back 3

Board of Directors

Front 4

An individuals stock ownership represents his proportionate interest in a company. If a company issues 100 shares of stock, each share represents an identical 1/100 or 1% ownership position in the company. In this company a person who owns 10 shares of stock owns ____ % of the company; a person who owns ____ shares of stock owns 50% of the company.

Back 4

10%

50 shares

Front 5

Corporations may issue two types of stock _____ and ______.

Back 5

Preferred stock

Common Stock

Front 6

_________ stock represents an equity ownership in a corporation, (but it usually does not have the same voting rights or appreciation potential as the other type of stock). It normally pays a fixed, semiannual dividend and has priority claims over another type of stock; that is this stock is paid FIRST if a company declares bankruptcy.

Back 6

Preferred Stock

Front 7

__________ stock can be classified as authorized, issued, outstanding, and treasury.

Back 7

Common Stock

Front 8

_______ stock refers to a specific number of shares the company has authorization to issue or sell.

Back 8

Authorization Stock

Front 9

Should a company decide to sell more shares than are authorized, the charter must be amended through a ___________ _____.

Back 9

Stockholder vote

Front 10

_________ stock has been authorized and distributed to investors. When a corporation issues, or sells, fewer shares than the total number authorized, it normally reserves the unissued shares for future needs.

Back 10

Issued stock

Front 11

Authorized stock that has been _______ is then normally reserved for future needs such as: raising new capital for expansion, paying stock dividends, providing stock purchase plans for employees or stock options for corporate officers, exchanging common stock for outstanding convertible bonds or preferred stock or satisfying the exercise of outstanding stock purchase warrants.

Back 11

Unissued

Front 12

Authorized but unissued stock (does / does not) carry the rights and privileges of issued shares and is not considered in determining a company's total capitalization.

Back 12

does not

Front 13

__________ stock includes any shares that a company has issued but has not repurchased; that is stock that is investor owned

Back 13

Outstanding

Front 14

________stock is stock a corporation has issued and subsequently repurchased from the public. The corporation can hold this stock indefinitely or can reissue or retire it.

Back 14

Treasury stock

Front 15

A corporation could reissue its ________ stock to fund employee bonus plans, distribute it to stockholders as a divided, or under certain circumstances, redistribite it to the public in an additional offering

Back 15

Treasury

Front 16

Treasury stock does not carry the rights of outstanding common shares such as _____ rights and the right to receive dividends.

Back 16

voting

Front 17

By buying its own shares in the open market the corporation reduces the number of shares outstanding. If fewer shares are outstanding and operating income remains the same, earnings per share _________.

Back 17

Increase

Front 18

A corporation buys back its stock for a number of reasons, such as to _______ earnings per share, have an inventory of stock available to distribute as stock options, fund an employee pension plan and use for future acquisitions.

Back 18

Increase

Front 19

ABC company has authorized 1 million shares of common stock. It issued 800,000 shares one year ago. It then purchased 200,000 shares for its treasury. How many shares of ABC stock are outstanding?

Back 19

(Issued stock - Treasury stock =outstanding stock)

800,000-200,000= 600,000

Front 20

Issued Stock - Treasury Stock = _________

Back 20

Outstanding Stock

Front 21

Issued Shares - Outstanding Shares = _______

Back 21

Treasury Stock

Front 22

For Investors ____ value is meaningless.

Back 22

Par value

Front 23

______ value is an arbitrary value the company gives the stock in the company's article of incorporation and has no effect on the stock's market price.

Back 23

Par value

Front 24

When the corporation sells stock the money recieved exceeding par value is recorded on the corporate balance sheet as _______ __ ____ __ ____, also known as paid-in surplus, capital surplus or paid in capital.

Back 24

Capital in excess of par

Front 25

A stock's ____ value per share is a measure of how much a common stockholder could expect to receive for each share if the corporation were liquidated.

Back 25

Book value

Front 26

______ value is most commonly used by analysts. It is the difference between the value of a corporation's tangible assets and liabilities divided by the number of shares outstanding. It differs greatly from a stock's market value.

Back 26

Book Value

Front 27

_______ price is the price investors must pay to buy the stock, is the most familiar measure of a stock's value.

Back 27

Market price

Front 28

________ value is influenced by a company's business prospects and the consequent effect on supply ( number of shares available to investors) and demand (the number of shares investors want to buy).

Back 28

Market Value

Front 29

Three methods of common stock valuation do not result in the same amount:

_______value= an arbitrary value

_______value= current liquidation value of a share

_______value= supply and demand value

Back 29

Par value

Book value

Market value

The market value is most meaningful to investors.

Front 30

Common stockholders use their ______ ______ to exercise control of a corporation by electing a board of directors (BOD) and by voting on important corporate policy matters at annual meetings.

Back 30

Voting rights

Front 31

Stockholders (do/do not) have the right to vote on the issuance of convertible securities because they will dilute current stockholders' proportionate ownership when converted (changed into shares of common).

Back 31

they do have the right