Chapter 11: Stockholders' Equity

These flashcards cover key concepts from Chapter 11 related to stockholders' equity, including types of stock, components of equity, and dividend calculations.

Stockholder Benefits

Voting rights, dividends, residual claims, preemptive rights.

Contributed Capital

Equity paid in by investors.

Retained Earnings

Total cumulative amount of reported net income less net losses and dividends.

Treasury Stock

Stock reacquired by the company, carrying no voting or dividend rights.

Common Stock

The most basic form of corporate ownership.

Preferred Stock

Stock with special rights, often having a fixed dividend rate.

Cash Dividends

Distributions of earnings to shareholders.

Stock Options

The option given to employees to purchase stock at a predetermined price.

Authorization of Stock

The maximum number of shares that a corporation can issue.

Market Value

The current price at which a share is traded in the market.

Preferred Stock Dividends

Dividends that must be paid to preferred shareholders before common shareholders.

Earnings per Share (EPS)

Net income minus preferred dividends divided by the average number of common shares outstanding.

Return on Equity (ROE)

Net income minus preferred dividends divided by average common stockholders’ equity.

Price/Earnings (P/E) Ratio

Current stock price divided by earnings per share.

Cumulative Dividend Preference

Unpaid dividends from previous years must be paid before common dividends are distributed.

Stock Splits

An increase in the number of shares and a corresponding decrease in par value per share.

Dividends Declaration Date

The date on which the company announces that it will pay a dividend.

Date of Record

The cutoff date used to determine which shareholders are eligible to receive a dividend.

Date of Payment

The date on which the dividend payment is made to shareholders.

Accumulated Other Comprehensive Income (Loss)

Unrealized gains and losses that are included in stockholders' equity.