Chapter 11 Flashcards
Stock Dividends..,
Increase #of outstanding shares
Indicates managements confidence
Advantages of corporations
Separate legal entity
Limited liability
Transferable ownership of rights
Continuous life
Disadvantages of corporations
Government regulation
Corporate taxation
Rights of stockholders
Vote at stockholder mtgs
Sell stock
Purchase additional stock
Receive dividends
Share any assets remaining after liquidation
Authorized stock
Stock allowed to be sold
Outstanding stock
Issued stock held by stockholders
Treasury stock
Bought or repurchased by the Company
Date of declarations
Record liability for dividend
Date of record
Do nothing
Date of payment
Record payment of cash to stockholders
Stock dividend
Company uses the amount of money that would be paid as a cash dividend to purchase additional shores for the shareholder
Stock split.
When 2 companies issue 2 or more shares for every existing share an investor holds
Cumulative
Dividends in arrears must be paid before dividends may be paid on common stock
Non cumulative
Undeclared dividends from current and prior years do not have to be paid in future years
Participating
dividends may exceed a stated amount once common stockholders receive a dividend equal to the preferred stated rate
