Glossary of Fin Acc: Chapter 11 Vocab: Stockholders Equity
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- Authorized Shares
- The maximum number of shares a corporation may issue as indicated in the corporate charter. (page 529)
- Issued shares
- The number of shares sold or distributed to stockholders.
- Outstanding Shares
- The number of shares issued less the number of shares held as treasury stock.
- Par Value
- An arbitrary amount that represents the legal capital of the firm.
- Additional Paid-in Capital
- The amount received for the issuance of stock in excess of the par value of the stock.
- Retained Earnings
- Net income that has been made by the corporation but not paid out as dividends.
- Callable Feature
- Allows the firm to eliminate a class of stock by paying the stockholders a specified amount.
- Convertible Feature
- Allows preferred stock to be exchanged for common stock.
- Cumulative Feature
- The right to dividends in arrears before the current-year dividend is distributed.
- Participating Feature
- Allows preferred stockholders to share on a percentage basis in the distribution of an abnormally large dividend.
- Treasury Stock
- Stock issued by the firm and then repurchased but not retired.
- Dividend payout ratio
- The annual dividend amount / annual net income.
- Retirement of Stock
- When the stock is repurchased with no intention to reissue at a later date.
- Stock Dividend
- The issuance of additional shares of stock to existing stockholders.
- Stock Split
- The creation of additional shares of stock with a reduction of the par value of the stock.
- Statement of Stockholders' Equity
- Reflects the differences between beginning and ending balances for all accounts in the Stockholders' Equity category of the balance sheet.
- Book value per share
- Total stockholders equity / # of shares of common stock outstanding.
- Market value per Share
- The selling price of the stock as indicated by the most recent transactions.
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