chap014 - Chapter 14 LONG-TERM FINANCING AN INTRODUCTION...

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Chapter 14 LONG-TERM FINANCING AN INTRODUCTION SLIDES CHAPTER ORGANIZATION 14.1 Common Stock Par and No-Par Stock Authorized versus Issued Common Stock Capital Surplus 14.1 Key Concepts and Skills 14.2 Chapter Outline 14.3 Common Stock 14.4 Par and No-Par Stock 14.5 Authorized vs. Issued Common Stock 14.6 Capital Surplus 14.7 Retained Earnings 14.8 Market Value, Book Value, and Replacement Value 14.9 Shareholders’ Rights 14.10 Cumulative versus Straight Voting 14.11 Cumulative vs. Straight Voting: Example 14.12 Proxy Voting 14.13 Dividends 14.14 Classes of Stock 14.15 Corporate Long-Term Debt: The Basics 14.16 Interest versus Dividends 14.17 Is It Debt or Equity? 14.18 Basic Features of Long-Term Debt 14.19 Different Types of Debt 14.20 Repayment 14.21 Seniority 14.22 Security 14.23 Indenture 14.24 Preferred Stock 14.25 Is Preferred Stock Really Debt? 14.26 The Preferred-Stock Puzzle 14.27 Patterns of Financing 14.28 The Long-Term Financial Deficit (2004) 14.29 Recent Trends in Capital Structure 14.30 Quick Quiz
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A-175 CHAPTER 14 Retained Earnings Market Value, Book Value, and Replacement Value Shareholders’ Rights Dividends Classes of Stock 14.2 Corporate Long-Term Debt: The Basics Interest versus Dividends Is It Debt or Equity? Basic Features of Long-Term Debt Different Types of Debt Repayment Seniority Security Indenture 14.3 Preferred Stock Stated Value Cumulative and Noncumulative Dividends Is Preferred Stock Really Debt? The Preferred Stock Puzzle 14.4 Patterns of Financing 14.5 Recent Trends in Capital Structure Which Are Best: Book or Market Values? ANNOTATED CHAPTER OUTLINE Slide 14.0 Chapter 14 Title Slide Slide 14.1 Key Concepts and Skills Slide 14.2 Chapter Outline 14.1. Common Stock Slide 14.3 Common Stock .A Par and No-Par Stock Slide 14.4 Par and No-Par Stock The stated value of a share of common stock is referred to as par value ; however, all common stock does not have a par value. In practice, these stated values are typically very low amounts, often pennies or
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CHAPTER 14 A-176 fraction of a penny after stock splits. The total par value of all shares is called the dedicated capital . .B Authorized versus Issued Common Stock Slide 14.5 Authorized vs. Issued Common Stock The articles of incorporation state the number of shares the firm is authorized to sell, which can only be changed by a vote of shareholders. The firm may, however, only issue a fraction of the authorized amount. .C Capital Surplus Slide 14.6 Capital Surplus When a firm sells shares, it typically does so at a price greater than the stated (par) value. The difference is referred to as capital surplus. .D Retained Earnings Slide 14.7 Retained Earnings Most firms do not pay out all earnings as dividends. The portion that is reinvested in the business is retained earnings. The sum of par value, capital surplus, and accumulated retained earnings is the firm’s book value. .E
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.

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chap014 - Chapter 14 LONG-TERM FINANCING AN INTRODUCTION...

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