Common Stock - Common Stock Common Equity The sum of the...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Common Stock Common Equity : The sum of the firm’s Common Stocks, paid in capital ,and retained earnings, which equals the common stockholders ’total investment in the firm stated at book value. Par Value : The Nominal or face value of Stock or Bond Retained Earnings # Common Stock is a certificate representing partial ownership in a corporation. • Common Stock may be issued by corporation • To obtain long term funds • Issuing authority is not obligated to repurchase • Shareholder may sell it to secondary market • Purchaser—individual--- financial institution • Primary Stock Market – enables corporations to issue new stock to investors (New Financing) • Secondary Stock Market – enables investors to sell stocks that they had previously purchased (Liquidity for investors) Legal Rights & Privileges of Common Stockholders • Ownership & Voting Rights • Election of the Board of Directors • Authorization to issue new shares of C.S. • Amendment to the corporate charter • Adoption of by laws • Rights on profits : Dividend Proxy : A document giving one person the authority to act for another , typically the power to vote shares of common stock. Proxy Fight : An attempt by a person or group of people to gain control of a firm by getting its stockholders to grant that person or group the authority to vote their shares in order to elect a new management team. Takeover : An action whereby a person or group succeeds in ousting a firm’s management and taking control of the company. • Preemptive Rights : Existing shareholder priority should be given to the existing shareholder to purchase the new issues. Evaluation of Common Stock as a Source of Funds From the Corporation point of View Advantages 1.C.S . dose not legally obligate the firm to make payments to stock holders. 2. C.S. carries no fixed maturity date. 3. Sale of C.S. increase the credit worthiness of the firm....
View Full Document

This note was uploaded on 03/24/2012 for the course BBA SBM taught by Professor Goa during the Spring '09 term at East West University, Chicago.

Page1 / 20

Common Stock - Common Stock Common Equity The sum of the...

This preview shows document pages 1 - 6. Sign up to view the full document.

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