Chapter 10

Question 1

The amount for which shares are issued

Answer 1

STATED (OR NOMINAL) VALUE

Question 2

The amount stated in the corporate charter below which shares cannot be sold upon initial offering.

Answer 2

PAR VALUE

Question 3

Increases the marketability of a corporation’s shares and increases the number of shares issued and outstanding, and lowers the cost of each new share.

Answer 3

SHARE SPLIT

Question 4

The date dividends are declared.

Answer 4

DATE OF DECLARATION

Question 5

The date when dividends are paid to shareholders.

Answer 5

DATE OF PAYMENT

Question 6

Type of preferred shares that require any unpaid dividends accumulate from one year to the next and are payable from future earnings when a dividend is eventually declared by a corporation.

Answer 6

CUMULATIVE PREFERRED SHARES

Question 7

A dividend given to shareholders in the form of shares rather than cash.

Answer 7

SHARE DIVIDEND

Question 8

The amount of net assets represented by one share. When referring to common shares, it represents the amount of net assets not claimed by creditors and preferred shareholders. When referring to preferred shares, it represents the amount that preferred shareholders would receive if the corporation were liquidated.

Answer 8

BOOK VALUE