Equity Financing Module 1

This set of flashcards covers key concepts related to equity financing, types of capital stocks, and relevant accounting principles.

Equity Financing

A method of raising capital where investors contribute funds without the obligation to repay.

Debt Financing

Raising capital through loans that must be repaid with interest.

Contributed Capital

The amount that owners have contributed through the purchase of stock.

Capital Stock

Equity financing instruments that represent ownership in a company.

Retained Earnings

Net income earned by the company that is not paid out as dividends.

Preferred Stock

A type of stock that has dividend preference and typically no voting rights.

Common Stock

A type of stock that entitles shareholders to voting privileges and may receive dividends.

Par Value

A monetary amount assigned to each class of stock for accounting purposes.

Paid-in Capital

The excess of the selling price of the stock over its par value, recorded in the equity account.

Dividend Preference

The priority of preferred stockholders to receive dividends before common stockholders.