Chapter 14 Terms Flashcards
Book Value Per Share
The equity a common stockholder has in the net assets of the corporation from owning one share of stock
Cash Dividend
A pro rata distribution of cash to stockholders
Cumulative Dividend
A feature of preferred stock entitling the stockholder to receive current-year and any unpaid prior-year dividends before common stockholders are paid dividends
Declaration Date
The date the board of directors formally declares (authorizes) a dividend and announces it to stockholders
Deficit
A debit balance in retained earnings
Dividend
A corporation’s distribution of cash or stock to its stockholders on a pro rata (proportional) basis
Earnings Per Share (EPS)
The net income earned by each share of outstanding common stock
Liquidating Dividend
A dividend declared out of paid-in capital
Payment Date
The date dividends are transferred to stockholders
Payout Ratio
The percentage of earnings a company distributes in the form of cash dividends to common stockholders and is computed as cash dividends declared on common stock divided by net income
Prior Period Adjustment
The correction of an error in previously issued financial statements
Record Date
The date when ownership of outstanding shares is determined for dividend purposes
Retained Earnings Retrictions
Circumstances that make a portion of retained earnings currently unavailable for dividends
Retained Earnings Statement
A statement that shows the changes in retained earnings during the year
Return on Common Stockholders’ Equity
A measure of profitability that shows how many dollars of net income were earned for each dollar invested by the owners; computed as net income minus preferred dividends divided by average common stockholders’ equity
