chapter 11 and apxc

public ownership

stock for public sale and thousands of stockholders. issuance of stock and trading in stock market

private ownership

doesn’t offer its stock for public sale and has few stockholders

share

each unit of ownership

stockholders

have ultimate control of coporation and elect directors

board of directors

selected by stockholders and manage the company

executive officers

daily operations and CEO is president

proxy

vote on behalf

preemptive right

protects shaeholders proportional intrest in the corporation

corporations character/ articles of incorporation

legal document that establishes the corporations existence and outlines its governance, structure, and purpose

classes of stock

when all authorized shares have the same rights and characteristics (common and preferred)

par value

arbitrary amount assigned to each share of stock when authorized; established min per share and only changed with stock splits

stated value

no par stock that has an assigned '“stated” value per share

market price

amount that each share of stock will sell for in the market

treasury stock =

issued stock - outstanding stock

dividends

distribution of corporate profits to share holders, effects stock market rate and must have sufficient balance retained earnings and cash to pay

issued prefer stock

raise money w/o losing control, boost return earne by common stockholders

issue common stock

sell ownership of company and no paying dividends

Preferred stock

maintain control, equity not debt, pay dividend

issue debt

maintain control and required to pay principle and interest

cumulative

dividends in arrears must be paid before dividends may be paid on common stock

noncumulative

undeclared from current and prior years do not have to be paid in future years

seperate legal entity

share owners are protected

limited liability

assets are protected

transferable ownership rights

give shares to others

no mutual agency for stockholders

cannot bind company to personal contracts

easier capital accumulation

gain cash early on

govt regulations and taxation

expensive and double taxation

organization expenses

cost to start corporation, include fees an payments or charter or articles of incorporation

the preemptive right

protects shareholders proportional intrest in the corporation

authorized stock

number of shares that a coporation character allows to sell

issued stock

total amount sold to stockholders

outstanding stock

isszued stock currently held by stockholders

treasury stock

shares bought back by the corporation

split shares

make stocks more affordable and lets shareholders ahve more shares

preferred stock

no voting rights and receive dividends

nonparticipating preferred stock

limits dividends and only recieves annual dividend

participating preferred stock

recieves annual dividend and excess amount

treasury stock

prepresents sharesz of a company’s own stock that has been aquired

why treasury stocks

shares to buy other companies, avoid takeover, reissues employees as compensation, support the market price or show confidence

debit securites

include ntoes, bonds, cd

equity securitiews

stocks

debt securities held to maturity (HTM)

NO fair value adjustments and are held until maturity

debt securities trading

activily managed and traded for profit, sold prior to maturity, current asset,

Debt securities available for sale (AFS)

includes unrealized gain/loss,

equity invesments: insignificant influence

less than 20% voting stock

equity investment: significant influence

owns 20%-50% voting stock and uses eq method investment

equit investment: contolling influence

more than 50% of voting stock and uses consolidated financial

debt securities

creditor relationship, notes, bonds, and cds, pay interest

equity securities

ownership, invest in stocks,issued by companies, pay dividends

investments in bonds, land or other assets

not used in company’s operation