Unit 2 Corporate Forms of Business Management Learning Flashcards
the advantages and disadvantages of corporate organization are discussed. In addition, the chapter discusses the difference between the rights of stockholders of common stock, versus the rights of stockholders who own shares of preferred stock.
What are shares of a company’s own stock that it has reacquired?
Treasury Stock
or Treasury Shares
What do you call an omitted dividend on cumulative preferred stock that must eventually be paid (in arrears) before any monies can be distributed to common stockholders?
Dividends In Arrears
What is the preferred stock that is entitled to a periodic dividend, and those dividends must be paid (eventually) before any monies can be distributed to common stockholders??
Cumulative Preferred (Stock)
What do you refer to as the event (date) when a transfer of stock ownership between shareholders will occur without the right for the purchaser to receive any previously declared dividends?
Ex-Dividend
What is the Wcorporate action to increase the number of shares and reduce the par per share by a stipulated ratio (e.g., 2 for 1)?
Stock Split
What do you call a preferred stock that can be exchanged (converted to) for common stock at some pre-agreed ratio?
Convertible Preferred (Stock)
What technical provision establishes the “legal capital” of the firm and is frequently associated with common and preferred stock to satisfy statutory requirements?
Hint {P V}
Par Value
What is the amount by which a stock’s issue price exceeds its par value?
Hint: {P-I-C I E-o-P)
Paid-In Capital In Excess of Par
What is the residual equity interest in a corporation; last in liquidation but usually receiving the full benefits of any corporate growth?
Common Stock
What is event when the first time (initial) stock in a corporation is offered to the investing public; registration and other requirements must be met; proceeds may flow to the corporation or private shareholders
Initial Public Offering
What is a noncash corporate activity to provide shareholders with additional shares in proportion to existing ownership; makes for more shares outstanding, but does not change total equity?
Stock Dividend
What is the term also referred to as: “additional paid-in capital”?
Paid-In Capital In Excess of Par
What is usually called the par value of the stock of a corporation?
Legal Capital
What is the sum of legal capital plus paid-in capital in excess of par?
Hint: {T P-I-C}
Total Paid-In Capital
What do you call the documentation describing financial and business aspects of an initial public offering?
Prospectus
