Week 4 (pg 13 and 14)_Notes - Week 4 Monday, Feb 11, 2008...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Week 4 Monday, Feb 11, 2008 I. Corporate Finance II. A share of corporation’s stock grants the owner three specific rights. a. The shareholdermayreceive dividends if and when they are declared. b. The share holder has the right to vote unless excluded. c. The shareholder may participate in distribution at the time of liquidation. d. The stock does not grant a claim to any specific corporate asset. In this sense it is like an ownership interest in a partnership. III. There are different types of shares a. Authorized shares are provided forby the Articles of Incorportaion b. Issued Shares are the number of these shares that have been old. c. Treasury shares are issued shares that gthe corporation has repurchased o get rid of its excess cash and increase earnings –er share or economic value added. d. Outstanding shares = Issued shares _ treasury shares. e. Back in the day you would actually receive a paper certificate when you bought stock; in the digital age most state laws no longer require this. i. Thismeans fewer trees have to be cut down. ii. This also streamlines and expedites the transfer and recordkeeping process. IV. There are different types of stock a. Common stock is the default type of stock. It carries all the rights outlines above. i. Common stock can be divided into different classesk which may have different voting rights. ii. A corporation may issue on type of stock for employees and antother type for public investors (this is a control issue) iii. An S-corporporation may only have one type of stock( but different classes of common stock will meet this requirement. b. Preferred stock has priority for receipt of dividends of distributions but generally doesn’t carry voting rights. i. Preferred stock may also have priority on dissolution but this is rare. ii. TThere are two types of dividend preferences 1. Cumulative preferred stock can accumulate dividentds in arears; this is specified amount of dividend obligation that accures annually whether the board of Directors dieides to pay it or not. 2.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/20/2009 for the course AEM 3210 taught by Professor Grossman,da during the Spring '07 term at Cornell University (Engineering School).

Page1 / 3

Week 4 (pg 13 and 14)_Notes - Week 4 Monday, Feb 11, 2008...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online