Chapter 10 - Stockholders' Equity

A set of flashcards covering key terms and definitions related to stockholders' equity as discussed in Chapter 10.

Capital Stock

A form of equity that represents ownership in a corporation, divided into shares.

Shareholder Rights

Entitlements that shareholders have, such as voting on corporate matters and receiving dividends.

Cash Dividends

Payments made to shareholders from a company's earnings, which reduce retained earnings when declared.

Equity Financing

Raising capital by selling shares of the company to investors, giving them ownership interest.

Debt Financing

Borrowing funds from external sources with a contractual obligation to repay, including interest.

Preferred Stock

A class of stock that typically has a fixed dividend and priority over common stock in liquidation.

Common Stock

The most basic type of security representing ownership in a corporation with voting rights and residual claim.

Dividend Yield

A financial ratio that shows how much a company pays in dividends each year relative to its share price.

Dividend Payout Ratio

A measure of the percentage of earnings distributed as dividends to shareholders.

Earnings Per Share (EPS)

The portion of a company's profit allocated to each outstanding share of common stock.

Price-Earnings (P/E) Ratio

A valuation ratio calculated by dividing the current share price by its earnings per share.

Authorized Shares

The maximum number of shares that a company is legally allowed to issue, defined by its charter.

Issued Shares

Total shares sold and held by shareholders, including both common and preferred stock.

Outstanding Shares

Shares that are currently owned by shareholders, excluding treasury shares.

Liquidation Preference

The order in which investors are paid in the event of a company's liquidation, often prioritizing preferred shareholders.

Residual Claim

The right of shareholders to claim any remaining assets of a company after all debts and obligations have been settled.

Cumulative Dividends

Dividends on preferred stock that accumulate if not paid in a given period.

Callable Stock

Preferred shares that can be redeemed by the issuing company at a predetermined price.

Accumulated Other Comprehensive Income

A component of shareholders' equity that includes unrealized gains and losses, not included in net income.