Maximum number of shares a corporation can issue under its charter
Constitution for governing a corporation
The most basic form of capital stock. The common stockholders own a corporation.
Cumulative Preferred Stock
Preferred stock whose owners must receive all dividends in arrears before the corporation can pay dividends to common stockholders
Debit balance in Retained Earnings account
Corporations pay income taxes on corporate income. Then, stockholders pay personal income tax on the cash dividends that they receive from corporations
A detailed approach to measuring rate of return on equity, calculated as follows:
(Net Profit Margin) x (Total Asset Turnover) x (Leverage Ratio)
(Net Income Before Taxes/Net Sales) x (Net Sales/Average Total Assets) x (Average Total Assets/Average Stockholders' Equity)
Number of shares a corporation has issued to its stockholders
Minimum amount of stockholders' equity that a corporation must maintain for the protection of creditors.
No personal obligation of a stockholder for corporation debts.
The amount a corporation must pay a preferred stockholder in the event the company liquidates and goes out of business
Price for which a person could buy or sell a particular share of stock
Stock in the hands of stockholders
Arbitrary amount assigned by a company to a share of its stock
Stock that gives its owners certain advantages, such as the priority to receive dividends before the common stockholders and the priority to receive assets before common stockholders if the corporation should liquidate.
Rate of Return on Common Stockholders' Equity
(Net Income - Preferred Dividends)/(Average Common Stockholders' Equity)
A measure of profitability
Rate of Return on Total Assets
(Net Income)/(Average Total Assets)
Measures a company's success in using its assets to earn income for the stockholders
Redeemable Preferred Stock
A corporation reserves the right to buy an issue of stock back from its shareholders, with the intent to retire the stock
The price a corporation agrees to eventually pay for its redeemable preferred stock, set when the stock is issued.
The stockholder's ownership interest in the assets of a corporation
An increase in the number of authorized, issued, and outstanding shares of stock coupled with a proportionate reduction in the stock's par value.
A corporation own stack that it has issued and later reacquired.