Convertible Preferred Stock Premoney Valuation: $7,000,000[1] Capital Structure Following Series A Round: Existing holders of Common Stock 55% Option Pool 15%[2] Holders of Series A Preferred Stock 30% Total 100% Use of Proceeds: The Company shall use the proceeds from this financing for working capital purposes. Dividends: The Company will not pay dividends on its shares of Common Stock or any
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Check Point Stocks XACC/291 Preferred Stock is referred to as preferred due to owners of preferred stock have preferential treatment over the owners of common stock. When it comes to dividends and liquidation preferred stockholders receive their dividends before common stockholders receive theirs. If the corporation does not declare and pay the dividends to preferred stock, there cannot be a dividend on the common stock. In return for these preferences,
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records securities (stock) exchanged for the bond at the carrying amount (book value) of the bond d. Remove “Bonds Payable” from book e. Remove any unamortized discount (credit) or premium (debit) from book f. Record value of Common Stock at par value g. Record Paid-in-capital in Excess of Par h. No gain or loss is recognized upon conversion Bonds Payable 1,000 Premium on Bonds Payable 50 Common Stock 100 P/C Excess of Par – Common Stock 950 III
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appropriate method of financing. Through extensive discussion and evaluation the directors identified three distinct options, namely, selling $50 million in bonds at a 10% interest rate to a California Insurance Company or issuing 3 million in common stocks at $17.75 per share with a dividend rate of $1.50 per share or issuing 500 000 preference shares at a par of $100 per share and with a dividend rate of $10.50 per share (See appendix A for case assumptions). Discussion 1. Given the nature of
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Case 12 “Best practices “in Estimating the Cost of Capital The Cost of Capital The purpose of this case is to present evidence on how some of the most financially sophisticated companies and financial advisers estimate capital costs. This evidence is valuable in several respects. First, it identifies the most important ambiguities in the application of cost-of-capital theory, setting the stage for productive debate and research on their resolution. Second, it helps interested companies benchmark
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available to common shareholders for each share of stock outstanding. * Ignores any potential common shares which might arise from convertible securities. * Calculation: Net income (after tax) – Preferred dividends Weighted average outstanding common stock Numerator: Basic EPS Net income Less: Current period’s cumulative preferred stock dividends (always) Less: Noncumulative preferred stock dividends (only if declared) = Net income
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25000 | | | Common stock | | $ 15000 | | Paid-in cap. in excess of stated value-Comm. stock | | $ 10000 | Mar. 20 | Treasury stock-Common | $ 12000 | | | Cash | | $ 12000 | | | | | June 14 | Cash | $ 36000 | | | Treasury stock-Common | | $ 32000 | | Paid-in cap. from common treasury stock | | $ 4000 | Sept. 3 | Patent | $ 17000 | | | Common stock | | $ 10000 | | Paid-in
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previous stock offering and short-term bank loans, which do not occur often. More importantly, since most of the common stock is held by the management itself, CCI is able to maintain more control over financial decisions. These as a whole have contributed to its current economic state of steady increase in income and dividends per share (from 1$ to 1.5$ per share). Nevertheless, one of the financial problems that CCI currently encounters is the subpar performance of company’s common stock. Although
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elected by the stockholders 2. Benefits of Stock Ownership • A voice in Management - vote in stockholder's meeting • Dividends - receive a proportional share of earnings • Residual Claim - receive a share of remaining assets upon liquidation of company 3. Common Stock vs. Preferred Stock Common Stock Preferred Stock Type The basic voting stock issued by corporation The different type of stock with right over common stock, not really different from buying bond Voting
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ACCT 212 Final Exam Ratings: (0)|Views: 472 |Likes: 0 Published by ssdasdasdas See more ACCT 212 Final Exam / FinancialAccounting Click this link to get the tutorial:http://homeworkfox.com/tutorials/business/15355/acct-212-final-exam-financial-accounting/ 6. (TCO 6) Depreciation is a process to allocate the cost of long-life assets to each period'sincome statement and adjusts the value of the asset on the balance sheet. (1) Explain how thestraight-line method is computed (10 points) and
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