Chpt 11 Flashcards
Separate legal entity Limited liability of stockholders Transferable ownership rights Continuous life Lack of mutual agency for stock holders Ease of capital accumulation
Advantages of corporate characteristics
Government regulations
Corporate taxation
Disadvantages of corporate characteristics
Stockholders who are not its officers and managers do not have he power to bind corporation to contracts
Lack of mutual agency
A document that gives a designated agent the right to vote the stock
Proxy
When a corporation has only one class of stock his stock is called
Common stock
Any shares issued to obtain capital
Capital stock
Number of shares that a corporations charter allows it to sell
Authorized stock
Issued stock held by stockholders
Outstanding stock
Price at which stock is bought and sold
Market value
All authorized shares have the same rights and characteristics the stoc is
Common stock
Total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock
Paid in capital
Cumulative net income not distributed as dividends to its stockholders
Retained earnings
Important dates for dividends
Date of declaration
Date of record
Date of payment
Cash dividend paid by returning a portion of the capital contributed by stockholders
Liquidating cash dividend
Distribution of additional shares to stockholders according to their percent ownership
Stock split
Preferred stock on which dividends are limited to a maximum amount each year
Non participating preferred stock
Preferred stock that shares with common stockholders any dividends paid in excess of the percent stated on preferred stock
Participating preferred stock
Preferred stock with an option to exchange it for common stock at a specified rate
Convertible preferred stock
Gives the issuing corporation the right to purchase this stock from its holders at specified future prices and dates
Callable Preferred stock
The amount paid to call and retire a preferred share
Call price
A corporations required shares
Treasury stock (similar to unissued stock)
Treasury stock is what type of account
A contra equity account
