{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Mgmt 200 Spring 2011 Chapter 10

Mgmt 200 Spring 2011 Chapter 10 - Stockholders Equity...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Stockholders’ Equity Chapter 10 Stockholders’ Equity • Corporate form of organization • Benefits of Corporations – Access to large amounts of capital – Limited liability Limited liability – Liquidity – Risk sharing • Sources of stockholders’ equity – Contributed capital – Retained earnings Stockholders’ Equity Accounts • Common stock, at par • Preferred stock • Additional Paid-in Capital (APIC) • Retained Earnings • Other stockholders’ equity • Treasury stock (A contra-equity account)
Background image of page 1

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

View Full Document Right Arrow Icon
2 Contributed Capital • Authorized shares • Issued shares • Treasury stock • Outstanding shares Voting rights, dividend rights • Market Capitalization Shares outstanding x share price • Earnings per share Net income / Average common shares outstanding Issuing common shares • Par value (or Stated value) • Initial Public Offering (IPO) Cash 25,000,000 Common stock 100,000 Capital in excess of par 24,900,000 Issue of 1,000,000 shares, $0.10 par value, at $25 per share. Treasury Stock Transactions • Repurchase of shares: Treasury shares, at cost 800,000 Cash 800,000 Repurchase of 20,000 shares at $40 per share. • Reissue of treasury shares: Cash 50,000 Capital in excess of par 10,000 Treasury shares, at cost 40,000 Reissue of 1,000 shares at $50 per share.
Background image of page 2