Chapter 12 Flashcards
(16 cards)
Distribution
Payments to shareholders that are not a sharing of profits
Dividend
Distribution of a corporations profits to its shareholders
Dividend reinvestment plan
Plan allowing shareholders immediately use cash dividends to purchase more stock DRIP
Property dividend v cash
Distribution in the form of property
Share dividend
Distribution by a corporation of its own shares
Liquidation dividend
Distribution made when a corporation liquidates
Equity solvency test
Determine if dividends can be paid in which a corporation must be able to pay debts as they become due
Balance sheet test
Determine if dividends can be paid in which equity exceeds liabilities
Solvency
Ability to pay debts as they become due
Retained earnings
Net profits accumulated by a corporation
Capital surplus
Amount received by a corporation when it issues stock in excess of par value
Nimble dividends test
Determine if dividends can be paid in which corporation may pay a dividend if it has current profits even if there is a deficit for a prior accounting period
Ex-dividend
Status of a shareholder or share without the right to receive a declared dividend
Stock split
Division of outstanding shares
Reverse stock split
Reduction of outstanding shares
