Chapter 13 - Vocab

Question 1

The total number of shares that the State has approved for a corporation to sell.

Answer 1

Authorized shares

Question 2

A statement that has indicated the anticipated changes in each partner’s capital.

Answer 2

Budgeted statement of owner’s equity

Question 3

Preferred stock that gives the issuing corporation the right to rep purchase the preferred stock. It is stipulated price.

Answer 3

Callable preferred stock

Question 4

a cash distribution in the form of a check drawn on the incorporations bank account that is sent to each shareholder as of a certain date.

Answer 4

Cash dividend

Question 5

the basic ownership unit of a corporation.

Answer 5

Common stock

Question 6

preferred stock that gives the shareholder the right to convert the shares to other forms of capital as stated in the corporate charter at the option of the preferred stockholder.

Answer 6

Convertible preferred stock,

Question 7

Preferred stock that accumulates unpaid dividends overtime

Answer 7

Cumulative preferred stock

Question 8

The date on which the Board of Directors announces its decision to pay a dividend

Answer 8

Date of declaration

Question 9

The date on which the corporation formally pays dividends to shareholders of record

Answer 9

Date of payment

Question 10

the date on which the secretary of the corporation examines the stock ownership transfers book to determine who is officially registered as a shareholder of the corporation, and therefore eligible to receive the corporations dividends

Answer 10

Date of record

Question 11

When a company obtains funds in exchange for a liability to repay the borrowed funds

Answer 11

Debt financing

Question 12

A program that allows current shareholders to use their cash dividends to buy more shares of the companies stock

Answer 12

Dividend reinvestment program

Question 13

The amount of cumulative preferred stock dividends not paid in full when stipulated

Answer 13

Dividends in arrears

Question 14

A means for a company to obtain funds and exchange for an ownership interest in the company

Answer 14

Equity financing

Question 15

A financing strategy designed to increase the rate of return on the owners investment

Answer 15

Financial leverage

Question 16

The number of authorized shares a corporation has sold to its shareholders

Answer 16

Issued shares

Question 17

The portion of shareholders equity required by state law to be retained for the protection of the corporations creditors

Answer 17

Legal capital

Question 18

Price agreed to by a willing, unrelated buyer and seller

Answer 18

Market value

Question 19

Stock with a minimum issue, price or stated value established by the corporations Board of Directors, but no par value specified in the charter

Answer 19

No par stated value stock

Question 20

Stock that does not have a minimum price assigned to each share of stock

Answer 20

No par stock

Question 21

The number of shares issued and held outside the corporation

Answer 21

Outstanding share

Question 22

In arbitrary value assigned to shares of capital stock that is approved by the state in which the the business is incorporated

Answer 22

Par value

Question 23

Preferred stock that allows preferred shareholders the right to receive an amount in excess of the stated dividend rate or amount

Answer 23

Participating preferred stock

Question 24

A right of common shareholders that allows them to maintain their percentage interest in the corporation when it issues new shares of common stock

Answer 24

Preemptive right

Question 25

And ownership interest in a corporation with special privileges or preferences as to liquidation and dividends

Answer 25

Preferred stock

Question 26

The distribution of specific non-cash assets to the shareholders of a corporation

Answer 26

Property dividend

Question 27

Preferred stock that allows a shareholder to turn in or redeem the preferred stock for cash at the shareholders option

Answer 27

Redeemable preferred stock

Question 28

Pre-purchased issued shares that the corporation will never re-issue

Answer 28

Retired shares

Question 29

A ratio that measures the proportion of income available to provide a return for common stockholders

Answer 29

Return on common equity ratio

Question 30

Io that measure measures the performance of the company in terms of the owner's investment

Answer 30

Return on owners equity ratio

Question 31

the corporations recall of its old shares of stocks and issuance of a smaller number of new shares in their place

Answer 31

Reverse stock split

Question 32

the distribution of additional shares of the corporations stock to existing shareholders

Answer 32

Stock dividend

Question 33

The corporations recall of its old shares of stock and issuance of a larger number of new shares in their place

Answer 33

Stock split

Question 34

a measure of the company’s ability to service its debt

Answer 34

Times interest earned ratio

Question 35

The shares of the corporations issued stock that the corporation has re-purchased and intends to re-issue at a later date

Answer 35

Treasury stock