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Definitions |
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discount
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market rate > coupon rate
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retained earnings
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cumulative income less cumulative losses and dividends
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indenture
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bond contract that specifies legal provisions of bond issue
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treasury stock
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corporation's own stock that it reacquired and still holds
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operating activities inflows
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cash recieved from customers, dividends and interest earned on investments as well as interest earned on notes receivable balances
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financing
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cash received from borrowing on notes, mortgages, bonds etc from creditors.issuing stock to customers.cash paid for repayment of loan principle, repurchasing stock from owners, cash paid for dividends to owners, repayment of bond principle
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carrying value formula premium
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bond payable+ amortization 100,000+(3630-980-980) carrying value decreaes each year until maturity
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capital stock
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general term referring to a corporation's stock used in obtaining capital
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dilutive securities
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securities having the potential to increase common shares outstanding
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preferred stock
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stock with a priority status over common stockholders in one or more ways, such as paying dividends or distributing assets
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advantages of bonds
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stockholders maintain control bc bond holders cant vote. interest expense is deductable. impact on earnings is positive,
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outflow financing
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cash paid for repayment of loan principle, repurchasing stock from owners, cash paid for dividends to owners, repayment of bond principle
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date of payment
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date the corporation makes the dividend payment
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stock split
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occurs when a corporation calls in its stock and replaces each share with more than one new share; decreases both the market value per share and any par or stated value per share
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organization expenses
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costs such as legal fees and promoter fees to bring an entity into existence
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stated rate
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rate of interest period that is stated on the bond contract
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operating activities outflows
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purchase of goods for resale and services, salaries and wages, income taxes, interest on liabilities
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convertible preferred stock
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preferred stock with an option to exchange it for common stock at a specified rate
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financial leverage
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earning a higher return on equity by paying dividends on preferred stock or interest on debt at a rate lower than the return earned with the assets from issuing preferred stock or debt
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bond value or carrying value formula
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bonds payable - unamortized discount/premium on baonds payable
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large stock dividend
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stock dividend that is more than 25% of the previously outstanding shares
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date of declaration
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date the directors vote to pay a dividend
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changes in accounting estimates
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change in an accounting estimate that results from new information, subsequent developments, or improved judgment that impacts current and future periods
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minimum legal capital
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amount of assets defined by law that stockholders must invest in a corporation
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small stock dividend
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stock dividend that is 25% or less of a corporation's previously outstanding shares
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inflows from investing activities
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cash recieved from sale or disposal of property, plant, and equipment, sale or maturity of investments in securities
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market value per share
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price at which stock is bought or sold
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paid-in capital in excess of par value
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amount received from issuance of stock that is in excess of the stock's par value
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