Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

28 Cards in this Set

  • Front
  • Back

contract rate

coupon rate, nominal rate, stated rate

market rate

yield rate, effective rate

carrying value of the bonds

discount deducted from par value

minimum legal capital

par value that buyers must contribute

no par value stock

not assigned a value so it can be issued at any price without minimum legal capital

stated value stock

no par stock that is assigned a stated value which is the minimum legal capital

stockholders' equity

1) paid in capital 2) retained earnings

Paid in capital

total amount of cash and other assests the corporation receives from its stockholders in exchange for stock

retained earnings

cumulative net income or loss not distributed as dividends to its stockholders

stock dividend

distribution of additional shares of stock without any payment in return; does not reduce assets and equity but transfers equity from retained earnings to contributed capital

small stock dividend

25% or less of outstanding shares; recorded by capitalizing retained earnings for an amount equal to the market values of the shares

large stock dividend

25% or more of outstanding shares; recorded by capitalizing retained earnings for the minimum amount required by law

stock split

distribution of additional shares according to percentage ownership; calls in outstanding shares and issues more than one new share in exchange for each old share

stock split

reduces par or stated value, no changes made only change in description on stock account

preferred stock

special rights that give it priority over common stock

cumulative preferred stock

right to be paid both current and all prior periods unpaid dividends before any dividend is paid to common stockholders

dividend in arrears

unpaid dividend amount that belongs to cumulative preferred stockholders

noncumulative preferred stockholders

no right to prior periods unpaid dividends

nonparticipating preferred stock

limits dividends to a maximum amount each year; after maximum is reached then common stockholders receive any additional dividends

participating preferred stock

allows preferred stockholders to share with common stockholders in any dividends paid in excess

convertible preferred stock

gives holders option to exchange their preferred shares for common shares

callable preferred stock

gives corporation the right to purchase/retire this stock from its holders

call price

aka redemption value; amount paid to call share is set when stock is issued

financial leverage/trading on the equity

use of preferred stock to increase return to common stockholders

treasury stock

corporations reacquired shares; not an asset, no voting rights but can be issued at less than par

prior period adjustments

corrections of errors in prior period financial statements; reported in statement of retained earnings

statement of stockholders equity

lists beginning and ending balances of key equity accounts and describes change made in that period

stock options

rights to purchase common stock at a fixed price over a specified period