Chapter 11 Reporting and Interpreting Owners Equity_Notes

Chapter 11 Reporting and Interpreting Owners Equity_Notes -...

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Chapter 11 – Reporting and Interpreting Owners’ Equity Ownership of a Corporation Benefits of stock ownership o Voice in management – can vote in stockholders’ meetings on major issues o Dividends – receive proportional share of profits o Residual claim – receive a proportional share of remaining assets upon liquidation Authorized number of shares – the maximum number of shares of a corporation’s capital stock tat can be issued as specified in the charter Issued shares – represent total number of share of stock that have been sold Outstanding shares – total number of shares of stock that are owned by stockholders on any particular date o Issued shares – treasury stock = outstanding shares Treasury stock – stock that has been bought back by the company Earnings per share = net income / average umber of shares of common stock outstanding o Widely used measure of profitability Common Stock Transactions Common stock – basic voting stock issued by a corporation Par value – nominal value per share of capital stock specified in the charter; it serves as the basis for legal capital Legal capital – permanent amount of capital defined b state law tat must remain
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This note was uploaded on 02/20/2009 for the course AEM 221 taught by Professor Little,j. during the Fall '08 term at Cornell.

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Chapter 11 Reporting and Interpreting Owners Equity_Notes -...

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