Chapter 11 - the stocks value in the secondary market. 7....

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 11. 1. Advantage of a corporation a. Simple to become an owner b. Easy to transfer ownership c. Provides limited liability 2. Ownership of a corporation a. Voting b. Proportionate distributions of profits c. Proportionate distributions of assets in liquidation 3. Types of capital stock a. Common stock  i. Basic voting stock ii. Ranks after preferred stock iii. Dividend set by board of directors b. Preferred stock i. Preferred over common stock ii. Usually has no voting rights iii. Usually has a fixed dividend rate 4. Par value a. Nominal value b. Legal capital – amount of capital, required by the state that must remain invested in  the business. 5. 2 primary source of SE
Background image of page 1

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

View Full DocumentRight Arrow Icon
a. contributed capital i. common stock, par value ii. capital in excess of par value b. retained earnings 6. Stock option allows employees to purchase stock from the corporation at a fraction of 
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: the stocks value in the secondary market. 7. Treasury stock no voting/dividend rights, contra equity account. 8. Cash dividends a. declared by board of directors b. create liability when declared c. not legally required d. require sufficient retained earnings and cash 9. Dividend yield = dividends per share/ market price per share a. the higher the better 10. Distribution of additional shares of stock to stockholders a. no change in total Stockholder Equity b. All stockholders retain same percentage ownership c. No change in par values 11. if stock dividend is less than 25%, record at current market value of stock 12. if stock dividend is more than 25%, record at par value of stock 13. STOCK SPLIT? 14. PAGE 244 slide 1!!! 10. 3....
View Full Document

This note was uploaded on 09/22/2009 for the course AEM 210 taught by Professor Jacklittle during the Spring '05 term at Cornell University (Engineering School).

Page1 / 3

Chapter 11 - the stocks value in the secondary market. 7....

This preview shows document pages 1 - 3. Sign up to view the full document.

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