accumulated other comprehensive income (AOCI): The cumulative change in shareholders’ equity that results from the gains and losses that bypass net income (recorded in other comprehensive income) but affect shareholders’ equity.

authorized shares: The amount of share capital that a corporation is authorized to sell. The amount may be unlimited or specified.

cash dividend: A pro rata (proportional) distribution of cash to shareholders.

Contributed Surplus: A source of contributed capital that can result from certain types of equity transactions, including the reacquisition of shares.

cumulative: A feature of preferred shares that entitles the shareholder to receive current-year and unpaid prior-year dividends before common shareholders receive any dividends.

declaration date: The date the board of directors formally declares (approves) a dividend and announces it to shareholders.

dividend yield: A measure of the percentage of the share price that is paid in dividends. It is calculated by dividing dividends per share by the share price.

dividends in arrears: Dividends that were not declared on cumulative preferred shares during a period.

income available to common shareholders: Net income less the annual preferred dividend for cumulative preferred shares. The dividend is deducted for noncumulative preferred shares only if declared.

initial public offering (IPO): The initial offering of a corporation’s shares to the public.

issued shares: The portion of authorized shares that has been sold.

legal capital: The amount per share that must be retained in the business to protect corporate creditors. Equal to the proceeds received from the issue of most shares.

market capitalization: A measure of the fair value of a company’s equity. It is calculated by multiplying the number of issued shares by the share price at any given date.

noncumulative: Preferred shares that are entitled to the current dividend, if declared, but not to any undeclared and unpaid amounts from prior years.

normal course issuer bid: The reacquisition of a specified percentage of a company’s own shares from the general public for a predetermined price and period, subject to regulatory approval.

payment date: The date dividends are paid or distributed to shareholders.

payout ratio: A measure of the percentage of the net income distributed in the form of cash dividends to common shareholders. It is calculated by dividing cash dividends by net income.

preferred shares: Share capital that has contractual preferences over common shares in certain areas.

record date: The date when ownership of shares is determined for dividend purposes.

retained earnings restrictions: Circumstances that make a portion of retained earnings currently unavailable for dividends.

return on common shareholders’ equity: A measure of profitability from the common shareholders’ point of view. It is calculated by dividing net income minus preferred dividends by average common shareholders’ equity (total shareholders’ equity minus preferred shares).

statement of retained earnings: A statement that summarizes the changes in the Retained Earnings account during the period. This statement is issued only by private companies reporting using ASPE.

stock dividend: A pro rata (proportional) distribution of the corporation’s own shares to shareholders.

stock split. The issue of additional shares to shareholders accompanied by a reduction in the legal capital per share.

weighted average number of common shares: A weighted average of the number of common shares issued during the year. Shares issued or repurchased during the year are weighted by the fraction of the year for which they have been outstanding.