Issuance of Stock

Question 1

Debt security

Answer 1

Bond; held by creditor

Question 2

Equity security

Answer 2

Stock; held by owner

Question 3

Issuance of Stock

Answer 3

When corp sells its own stock

Question 4

Subscription

Answer 4

Written offer to buy stock from corp

Question 5

Pre-incorporation subscription

Answer 5

Written offer to buy stock from prospective corp (not yet formed); irrevocable for 6 months unless all subscribers agree

Question 6

Post-incorporation subscription

Answer 6

Written offer to buy stock from corp; revocable until accepted by the corp, i.e., until BOD accepts

Question 7

Consideration

Answer 7

Corporation must receive consideration when it issues stock; includes “any tangible or intangible property or benefit to the corp” (including promisssory notes and future services)

Question 8

Par

Answer 8

Minimum issuance price; hoe much corp must receive for its stock

Question 9

Treasury Stock

Answer 9

Stock company issued and then reacquired; considered authorized

Question 10

Pre-emptive Right

Answer 10

Right of an existing SH of common stock to maintain her percentage of ownership by buying stock whenever there is a new issuance of stock FOR MONEY