Corporate Financial Structure Flashcards
Stock provisions which must be authorized by the Articles of Incorporation must include
Number of Authorized shares Whether stocks are Par or No Par value Classes of stock Voting rights Dividend provisions
In order to convert preferred shares to common
It must be stated in the articles of incorporation
A corporation may resell treasury shares
without regards to par value. Buyer will not have additional liability
In many states a shareholder who owns common stock is liable to a creditors
if they paid less that par value in connection with original issue. Liability is difference between paid and par value
A promise to perform services is valid consideration
as long as it is for at least par value
If a corporation accepts an offer to buy stock subscriptions
the subscriber becomes liable for the purchase. owner becomes liable if paid less that full amount
What are examples of corporate debt securities
1) Registered Bonds
2) Bearer Bonds
3) Debenture Bonds
4) Mortgage Bonds
5) Redeemable Bonds
6) Convertible Bonds
A warrant
is NOT corporate debt BUT IS a stock option to purchase a number of shares at a certain time.
Liquidating Dividends
represent a return of the stockholder’s capital and considered a Capital Distribution.
Both Cash and Property distribution
Are asset distributions.
Property distribution is recorded
At FMV at date of transfer
What is Ultra Vires Acts
Acts beyond the scope of the powers of the corporation
Treasury Stocks
Issued stocks that are no longer outstanding because company repurchased them
Characteristics of treasury stocks
Do not receive Dividends and are NOT Votable
A corporation by law may
issue one or more classes of Common Stock and preferred stock
