Equity Financing Module 6

Flashcards covering key concepts related to equity financing, preferred stock, and dividends.

Preferred Stock

A type of stock that has a fixed dividend and is paid before common stockholders.

Cumulative Preferred Stock

Preferred stock that requires unpaid dividends from prior years to be paid before common stock dividends are distributed.

Dividends in Arrears

Prior years unpaid preferred stock dividends that are not recorded as liabilities but must be disclosed in financial statements.

Dividend Preference

A characteristic of preferred stock where preferred stockholders are paid dividends before common stockholders.

Annual Preferred Stock Dividend

The total dividends calculated for preferred stock based on the stock's rate and outstanding shares.

Financial Statements Disclosure

The requirement to disclose dividends in arrears in the financial statements.

Common Stockholders

Holders of common stock who receive dividends after preferred stockholders have been paid.

Dividend Calculation Formula

The method used to calculate dividends, typically involving par value, dividend rate, and number of shares.