Lecture 20 and 21 WebCT

Lecture 20 and 21 WebCT - LECTURES 20 & 21 SHAREHOLDERS...

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SHAREHOLDER’S EQUITY MGCR 211
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Overview User Relevance Forms of Organizations Shares Dividends, Stock Splits and Options Financial Statement Analysis
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Shares All corporations (public or private) have shares. Number of shares to be issued by a company are determined in the articles of incorporation Shares can be common shares or preferred shares. A company can have different types of common shares with different rights
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Common Shares Common shares carry a basic set of rights Share profits and losses Voting rights Selection of corporate management Residual rights to assets upon liquidation Rights to purchase additional shares from a subsequent issuance (to avoid diluting your interest)
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Preferred Shares Have preference over common shares for dividends and assets in instance of a liquidation Preferred shares can have cumulative or non-cumulative dividends If dividends are paid in a year, the preferred shareholders must be paid first Preferred shares usually do not have voting rights
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Preferred Shares - Cumulative What happens if dividends are not declared in a year on cumulative dividends preferred shares? Dividends in arrears: Dividends that are owed to the preferred shareholders, but have not been declared or paid Basically, the dividends owed to preferred shareholders will accumulate and be paid in the future The company has an agreement to pay a
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Other Features of Shares Convertible Preferred Shares: option to exchange your shares for a common
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Lecture 20 and 21 WebCT - LECTURES 20 & 21 SHAREHOLDERS...

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