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35 Cards in this Set
- Front
- Back
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Maximum Number of shares that the corporation is permitted to issue-- big number number |
Authorized shares |
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Number of authorized shares actually sold |
Issued stocknumber |
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Number of shares issued less the number of shares repurchased by the by the corporation (treasury stock)- in hands of shareholders |
Outstanding stock |
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Contra- equity account- number of shares issued that have been repurchased by the corporation- can't make profit or loss investing in own stock |
Treasury stock |
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A form of compensation that gives employees and executives the right to buy stock at a set price |
Stock option |
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When the issuer of a bond has the right to pay off a bond before its maturity, it is called? A) convertible bond B) secured bond C) callable Bond D) debenture |
C) callable bond |
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Great than par value=100< Amount sold above face value |
Premium |
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Less than par value= <100 Amount sold below face value |
Discount |
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Equals par value=100=100 |
Par |
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A bond that can be exchanged for stock at the option of the bondholder is called: A) convertible bond B) secured bond C) callable Bond D) debenture |
A) Convertible bond |
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If a company issues 200 4.5% $1000 face value bonds and they sell at 101.5, then the bond sold at a _________ |
Premium |
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When the market rate of interest is above stated rate, then bonds sell at a |
Discount |
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When the market rate of interest is lower/less than stated rate, then bonds sell at a |
Premium |
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All of the following are stockholders equity accounts EXCEPT: 1) treasury stock 2) preferred stock 3) retained earnings 4) dividends payable |
4) dividends payable (liability) |
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The number of shares of issued stock equals: A) authorized shares minus outstanding shares B) outstanding shares plus treasure shares C) authorized shares plus outstanding shares D) authorized shares minus treasury shares |
B) outstanding shares plus treasury shares |
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The contributed capital of a corporation does not include: A)additional paid in capital B)preferred stock issued C)common stock issued D)retained earnings |
D) retained earnings |
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The price a stock actually trades for among investors |
Market value |
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Par value and ______ value stock are accounted for in the same way in the capital account |
Stated |
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_______ _______ stock- Has a value assigned on the certificate. The value is arbitrary and is not the actual market value of the stock.
Relates to the legal capital |
Par value stock |
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______ _____ stock- has no par value on the certificate, but may have a stated value For purposes of the capital account |
No par stock |
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______- borrower (the company) |
Issuer |
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___________- lender (the investor) |
Bondholder |
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______ value- amount to be paid by the issuer at maturity |
Face value |
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______ ______ rate- amount paid annually on the face value |
Stated interest rate- also known as coupon or contract rate |
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______ bond- bond based on collateral (ex. A mortgage) |
Secured |
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Debt to total assets ratio? |
Total liab. / total assets
Liab- unearned revenue
assets on bottom
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Debt to equity ratio? |
Total liab. / total equity
Equity on bottom |
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Times interest earned (accrual) |
Net income + income tax exp + interest exp / interest exp. |
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Times interest earned (cash basis) |
Cash flow from ops + interest paid + tax pay / interest paid |
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Creates liability- Dr dividends Cr dividends payable |
Declaration date |
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No journal entry--- = outstanding shares |
Date of record |
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Payment date- entry? Dr/Cr dividends payable Dr/Cr cash |
Dr dividends payable Cr cash |
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Dr or Cr treasury stock Dr or Cr cash Dr of Cr Retained earnings |
Dr treasure stock (unless resale/selling)
Cr cash
Dr retained earnings |
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Return on common equity ratio? |
Net income - preferred div. / average common stockholder equity |
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After tax cost of interest formula? |
(1- tax rate) x interest expense |
