Organizing and Managing ch 6

Organizing and Managing ch 6 - outstanding the issued...

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Organizing and Managing a corporation Stockholders – have ultimate control, but not involved with day-to-day business Stockholders usually meet once a year Rights of stockholders Vote a stockholder’s meetings Sell stock Pre-emptive right to purchase additional shares of stock Receive dividends, if declared Share equally in any assets remaining after creditors are paid in a liquidation Board of directors – selected by a vote of the stockholders They have the overall responsibility for managing the company President: Chief Executive Officer (CEO) Secretary, Vice president Finance, vice president production, VP marketing Stock Basics 3 categories of stock… authorized : the number of shares a corporation has been authorized to issue based upon the charter (permission from the government) issued : number of authorized shares that the corporation has offered to public they may not necessarily need/want all the authorized shares at once issued shares cannot be greater than authorized shares
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Unformatted text preview: outstanding: the issued shares that are currently held by shareholders difference between issued and outstanding is treasury stock – shares that the corporation holds selling (issuing) stock par value : arbitrary amount given to each share of stock when it’s authorized Home Depot Par value: $0.05 Market price : is the amount that each share of stock will sell for in market Home Depot Inc. Market value: Par value NOT EQUAL to market price Market value is subject to change very often – determines if you make money of the stock exchange or not No-par stock: which has no par value that can be assigned a stated value by the board of directors Stockholder’s equity Paid-in capital: capital which is contributed by the stockholders by buying shares of stock Retained earnings: earnings of the business which haven’t been distributed to the owners of the company – money generated through operations...
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