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10 Cards in this Set
- Front
- Back
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Secured Bonds
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Have specific assets of the issuer pledged as collateral for the bonds.
p. 512 |
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Unsecured Bonds
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Issued against the general credit of the borrower. Large Corporations with good credit ratings use unsecured bonds extensively. For example, at one time DuPont reported more than $2 billion of unsecured bonds outstanding.
p. 512 |
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Callable Bonds
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Bonds that the issuing company can retire at a stated dollar amount prior to maturity. p.512
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Par Value Stock
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Capital stock that has been assigned a value per share in the corporate charter. It used to be used to determine the legal capital that must be retained in a business for the protection of corporate creditors. That amount is not available for withdrawal by stockholders. Thus, in the the past, most states required the corporation to sell its shares at par or above. However, par has no relationship with market value and in the majority of cases is an immaterial amount. Today many states do not require a par value and use other mans to protect creditors. p. 577
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Free Cash Flow
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Describes the cash remaining from operating activities after adjusting for capital expenditures and dividends paid. Practice examples on p.61-62 and p.639-641
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Authorized stock/shares
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The amount of stock that a corporation is authorized to sell as indicated in its charter. p. 576
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Outstanding stock/shares
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Capital stock that has been issued and is being held by stockholders. p. 581
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Issued stock/shares
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The total number of company's shares that have been sold and are held by shareholders. couldn't find in book- investorwords.com
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What is Preferred Stock?
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Preferred stock is an additional class of stock that has contractual provisions that give it preference or priority over common stock in certain areas.
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What are the characteristics of Preferred Stock?
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(1) Typically preferred stockholders have priority in relation to (a) dividends and (b) assests in the event of liquidation. However, they sometimes do not have voting rights.
(2)Approximately 7% of US companies have one or more classes of preferred stock. (3) Companies may issue preferred stock for cash or for noncash consideration. The entries for these transactions are similar to the entries for common stock. When a corporation has more than one class of stock, each paid in capital account title should identify the stock to which it relates. ex-p. 582 (4) May have either a par value or no-par value (5) In the stockholders' equity section of the balance sheet, companies show preferred stock first because of its dividend and liquidation preferences over common stock. p. 582 |
