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13 Cards in this Set
- Front
- Back
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Authorized stock
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Number of shares that the corporation may issue based on the articles of incorporation
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Outstanding
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Number of shares held by stockholders
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The Corporate Organization Advantages
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Limited liability
Ease of raising capital Lack of mutual agency Ease of transferring ownership |
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The Corporate Organization Disadvantages
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More government regulation
Double taxation Limited liability Separation of ownership and control |
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Par Value
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An arbitrary amount assigned to each share of stock
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Legal capital
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The number of shares issued times the par value
The minimum amount that can be reported as contributed capital |
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Disadvantages of Equity Financing
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Issuance of stock dilutes ownership
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Date of Declaration
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Board of directors formally declares that the corporation is going to pay a dividend
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Date of Record
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Persons who own the stock on the record date will receive the dividend
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Date of Payment
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Date on which the dividend is paid to the stockholders of record
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Return on Equity
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Most important ratio associated with stockholders’ equity
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Price/Earnings (P/E) Ratio
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A measure of investors’ confidence in a company’s future
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Convertible Preferred Stock
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Stockholder’s may exchange their shares of preferred stock for shares of common stock at a ratio stated in the company’s preferred stock contract
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