Corporations: Organization, Stock Transactions, and Dividends

These flashcards cover the key vocabulary and concepts related to corporations, stock transactions, and dividends as outlined in the lecture notes.

Corporation

A legal entity distinct and separate from its owners, allowing it to own property, incur liabilities, and sell shares.

Shareholders

Individuals or entities that own shares of stock in a corporation, possessing limited liability.

Stock

Shares of ownership in a corporation that can be bought, sold, and transferred.

Paid-In Capital

Funds raised by a corporation through the issuance of stock.

Cumulative Preferred Stock

Preferred stock that entitles the holder to receive dividends that were not declared in prior years.

No-Par Stock

Stock that is issued without a par value, thus not assigned a specific nominal value.

Stock Dividend

A distribution of additional shares to existing shareholders, affecting only stockholders' equity.

Stock Split

A process by which a corporation reduces the par value of its stock and issues additional shares, aimed at lowering market price per share.

Treasury Stock

Previously issued stock that has been repurchased by the corporation, typically not entitled to dividends.

Limited Liability

A characteristic of ownership in a corporation that protects shareholders from being personally liable for the corporation's debts.