Accounting Chapter 11
Terms
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Earnings per Share =
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Earnings per Share = Net Income / Average # of Shares of Common Stock Outstanding
States the net income of a corporation on a per share of common stock basis
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Authorized Number of Shares
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the maximum number of shores of a corporation's capital stock that can be issued as specified in the charter
- Common Stock
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the basic voting stock issued by a corporation
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Cumulative Dividend Preference
- the preferred stock feature that requires specified current dividends not paid in full to accumulate for every year in which they ar not paid. These cumulative preferred dividends must be paid before any common dividends can be paid
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Current Dividend Preference
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the feature of preferred stock that grants priority on preferred dividends over common dividends
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Declaration Date
- the date on which the board of directors officially approves a dividend
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Dividend Yield Ratio =
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Dividend Yield Ratio = Dividends per Share / Market Price per Share
Measure the dividend return on the current price of the stock
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Dividends in Arrears
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dividends on cumulative preferred stock that have not been declared in prior years
- Issued Shares
- represent the total number of share of stock that have been sold
- Legal Capital
- the permanent amount of capital defined by state law that must remain invested in the business; it serves as a cushion for creditors
- No-Par Value Stock
- capital stock that has no par value specified in the corporate charter
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Oustanding Shares
- refer to the total number of shares of stock that are owned by stockholders on any particular date
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Par Value
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the nominal value per share of capital stock specified in the charter; it serves as the basis for legal capital
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Payment Date
- the date on which a cash dividend is paid tot he stockholders of record
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Preferred Stock
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stock that has specified rights over common stock
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Record Date
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the date on which the corporation prepares the list of current stockholders as shown on its records; dividends can be paid only to the stockholder who own stock on that date
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Stock Dividend
- a distribution of additional shares of a corporation's own stock
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Stock Split
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an increase in the total number of authorized shares by a specified ration; it does not decrease retained earnings
- Treasury Stock
- a corporatio's own stock that had been issued but was subsequently reacquired and is still being held by that corporation