required conditions during at least the most recent annual fiscal period and any subsequent interim period presented. 50-4 An entity that issues preferred stock[->0] (or other senior stock) that has a preference in involuntary liquidation considerably in excess of the par or stated value of the shares shall disclose the liquidation preference of the stock (the relationship between the preference in liquidation and the par or stated value of the shares). That disclosure shall be made in the equity
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Dividend Stock Split Stockholders’ equity Paid in capital Common stock, $10 par 600,000 630,000 600,000 Paid in capital in excess par value 0 12,000 0 Total paid in capital 600,000 642,000 600,000 Return earnings 900,000 858,000 900,000 Total stock holders’ equity 1,500,000 1,500,000 1,500,000 Outstanding shares 60,000 66,000 120,000 Exercise E12-1 1. Companies purchase investments in debt or stock securities
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[pic] |59% (17 out of 29 correct) |Responses to questions are indicated by the [pic]symbol. | | | | |[pic] |1. |The stockholders of a corporation have unlimited liability. | | | |
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Problem Sheet # 9 Unit 9 – Cost of Capital 1. What is the company’s cost of equity capital if CCC’s common stock has a beta of 1.2, a risk-free rate of 4.5 percent and the expected return on the market is 13 percent? 2. The total market value for Disney was $60M at the start of this year. During the year Disney plans to raise and invest $30M in new projects. The company’s present market value capital structure, shown below is considered to be optimal. Assume that there is no short-term debt
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forms of business organization : * The proprietorship * The partnership * The corporation The special characteristics of the corporate form that affect accounting include : 1. Influence of state corporate law 2. Use of the capital stock or share system 3. Development of a variety of ownership interest 1. State Corporate Law Anyone who wishes to establish a corporation must submit articles of incorporation to the state in which incorporation is desired. After fulfilling
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Corporate Finance ADM 3350 M & P (Winter 2015) Assignment 1 Due Date: February 23, 2015 Question 1 (5 Marks) Varta Inc. has just issued a dividend of $1.50 per share on its common stock. The company paid dividends of $1.10, $1.15, $1.25, and $1.37 per share in the last four years. The stock currently sells for $48. a. What is your best estimate of the company's cost of equity capital using the arithmetic average growth rate in dividends? b. What if you use the geometric average growth rate? Solution:
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(Recording the Issuance of Common and Preferred Stock) Abernathy Corporation was organized on January 1, 2012. It is authorized to issue 10,000 shares of 8%, $50 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. 10-Jan | Cash | 400,000 | | | Common Stock | | 160,000 | | Paid-in capital - Common Stock (excess) | | 240,000 | 1-Mar |
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are not its officers and managers, do not have the power to bind the corporation to contracts—referred to as lack of mutual agency. * Ease of capital accumulation: Buying stock is attractive to investors because (1) stockholders are not liable for the corporation's acts and debts, (2) stocks usually are transferred easily, (3) the life of the corporation is unlimited, and (4) stockholders are not corporate agents. These advantages enable corporations to accumulate large amounts
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Together they discuss and negotiate a price for the security and the timing of the issue.Depending on the size of the issue, the investment banker may invite other firms to join in sharing the risk and selling the issue.Generally used in corporate stock and most corporate bond issues. 2) Best efforts offering Under this arrangement, the investment bankers agree to sell only as many securities as they can at an established price. They have no responsibility for securities that remain unsold
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1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (10 points) and (2) provide an example of the closing of an expense account, Salary Expense in the form of a journal entry. (10 points) (Points : 20) 1. We have to close temporary accounts at the end of a period because when the temporary accounts are closed, it brings their balances back down to zero. 2. I would Debit Salary Expense and Credit to PayrollExpenses 12/31
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