Corporations 11 Flashcards
_______ are debt interest in the Corporation.
Bonds
Bonds are _____ ______ in the corporation.
debt interest
A ______ is a promise by the Corporation to repay a specific sum of money at a definite time, with periodic payments of interest.
Bond
A bond is a _______ by the ________ to repay a specific sum of money at a definite time, with periodic payments of interest.
promise
corporation
A bond is a promise by the corporation to _______ a ______ ______ of _______ at a definite time, with periodic payments of interest.
repay
specific sum
money
A bond is a promise by the corporation to repay a specific sum of money at a _____ ______ with ______ _______ of _______.
definite time
periodic payments of interest
No right to vote or control the corporation.
bonds
Contract for bond =
indenture
What are the 2 types of bonds?
registered v. bearer bonds
Can bonds be redeemed?
yes
Bonds may ______ ______.
specify priority
Bonds may be converted into ____ _______ according to the _______.
equity interest
indenture
____ ______ are rated by ______ rating companies.
public bonds
private
Tax advantages
bonds
Easier to refinance
bonds
cheaper than borrowing from a bank
bonds
you don’t give out more control!
bonds
________ is a legally binding contract law analysis and potentially securities law.
debt
________ is generally comprised of either _______ or ______.
debt
loans or bonds
______ with either be ________(no collateral required) or ______. _____ debt with multiple lenders will generally require a determination of lien property.
debt
unsecured
secured
secured
The ____ ______ will have many contractual provisions designed to protect against risk to the lender.
loan agreement
The _______ will assess an interest charge to the borrower as the cost of utilizing the lender’s funds.
lender
What is a payment of profit to shareholders?
Dividends
What are dividends?
A payment of profit to shareholders
What can make stock more attractive and boost morale?
dividends
Dividends can make ______ more attractive and boost morale.
stock
What is taxable to the shareholder?
Dividends
Dividends are _______ to the shareholder! (perhaps including _____ ___ ____!)
taxable
capital gains taxes
Timing and amount determined by board discretion
dividends
Who determines the time and amount of dividends?
board discretion
Limits on distributions
1. ?
2.
3.
4.
- Solvency test
Limits on distributions
1.
2. ?
3.
4.
- Balance Sheet Test (impairment of Capital Test; Technical Insolvency Test)
Limits on distributions
1.
2.
3. ?
4.
- Can make stock more attractive and boost morale
Limits on distributions
1.
2.
3.
4. ?
- Taxable to the shareholder
