Contributed Capital -

Contributed Capital -

C

Callable preferred stock Preferred stock that can be redeemed or retired at a stated price at the option of the issuing corporation.

Common stock Shares of stock that carry voting rights but that rank below preferred stock in terms of dividends and the distribution of assets.

Convertible preferred stock Preferred stock that can be exchanged for common stock at the option of the holder.

Corporation "A separate legal entity having its own rights, privileges, and liabilities distinct from those of its owners."

Cumulative preferred stock Preferred stock on which unpaid dividends accumulate over time and must be satisfied before a dividend can be paid to common stockholders.

D

Date of declaration The date on which the board of directors declares a dividend.

Date of payment The date on which payment of a dividend is made.

Date of record The date on which ownership of stock for the purpose of receiving a dividend is determined.

Dividend The distribution of a corporation’s assets (usually cash generated by past earnings) to its stockholders.

Dividends in arrears Past dividends on cumulative preferred stock that remain unpaid.

Dividends yield Current return to stockholders in the form of dividends; dividends per share divided by market price per share.

Double taxation Taxation of corporate earnings twice—once as income of the corporation and once as income to stockholders based on the dividends they receive.

E

Ex-dividend "A description of capital stock between the date of record and the date of payment, when the right to a dividend already declared on the stock remains with the person who sells the stock and does not transfer to the person who buys it."

I

Initial public offering (IPO) A company’s first issue of capital stock to the public.

Issued stock The shares of stock sold or otherwise transferred to stockholders.

L

Legal capital The number of shares of stock issued times the par value; the minimum amount that can be reported as contributed capital.

Liquidating dividend A dividend that exceeds retained earnings; usually paid when a corporation goes out of business or reduces its operations.

N

Noncumulative preferred stock Preferred stock that does not oblige the issuer to make up a missed dividend in a subsequent year.

No-par stock Capital stock that does not have a par value.

O

Outstanding stock Stock that has been issued and is still in circulation.

P

Par value An arbitrary amount assigned to each share of stock; constitutes the legal capital of a corporation.

Preferred stock "Stock that has preference over common stock, usually in terms of dividends and the distribution of assets."

Price/earnings (P/E) ratio A measure of confidence in a company’s future; market price per share divided by earnings per share.


R

Residual equity The common stock of a corporation.

Return on equity A measure of management performance; net income divided by average stockholders’ equity.


S

Share of stock A unit of ownership in a corporation.

Start-up and organization costs The costs of forming a corporation.

Stated value A value assigned by the board of directors of a corporation to no-par stock.

Stock certificate A document issued to a stockholder indicating the number of shares of stock the stockholder owns.

Stock option plan An agreement to issue stock to employees according to specified terms.

T

Treasury stock "Capital stock, either common or preferred, that the issuing company has reacquired but has not subsequently resold or retired."

U

Underwriter An intermediary between the corporation and the investing public who facilitates an issue of stock or other securities for a fee.