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Definition
| a common form of financing, due within one year |
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Term
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Definition
| time to produce a product/service, sell the product or service and receive cash for the product/service |
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Term
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Definition
| results from an expense the business has incurred but not yet paid |
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Definition
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Term
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Definition
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Term
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Definition
| deferred revenues and revenues collected in advance |
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Term
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Definition
| where a company estimates how many things they will have to repair |
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Term
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Definition
not an actual liability, potential liability that depends on the future even arising out of past events
(lawsuits) |
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Term
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Definition
| groups of notes payable issued to multiple lenders called bondholders |
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Term
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Definition
| all mature at the same time |
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Term
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Definition
| installments over a period of time |
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Term
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Definition
| unsecured bonds. Person has faith in the company that they will pay the holder back |
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Term
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Definition
bond issued above face value
(better for company) |
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Term
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Definition
bond issued at a price lower than face value
(better for buyer) |
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Term
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Definition
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Term
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Definition
| interest rate printed on the bond certificate |
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Term
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Definition
| rate that investors demand for loaning their money |
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Term
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Definition
- divides a bond's discount or premium into equal periodic amounts over the bond's term
- the amount of interest expense is the same for each interest period
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Term
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Definition
| issuer may call or pay off those bonds at a prearranged price |
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Term
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Definition
| dollar amount assigned to each share of stock |
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Term
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Definition
| at a specific price whenever the issuer wants |
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Term
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Definition
| creates no liabilities or interest expense and is less risky to the issuing corporation |
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Term
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Definition
| amount of a company's net income for each share of its stock |
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Term
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Definition
| a business is a distinct entiry that exists apart from its owners |
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Term
| Continuous Life and Transferability of Ownership |
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Definition
Corps. have continuous lives regardless of changes in their relationship.
The transfer of the stock from one person to another does not affect the continuity of the corporation |
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Term
| Separation of Ownership and Management |
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Definition
| stockholders own the corporation but the board of directors- elected by stockholders- appoints officers to manage the business |
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Term
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Definition
| corporate earnings are subject to double taxation on their income |
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Term
| Advantages of selling stock |
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Definition
- can raise more profit by selling stock
- has a continuous life
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Term
| Disadvantages of selling stock |
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Definition
- separation of ownership
- corporate taxation
- gov't regulation
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Term
| Four Basic Rights of Stockholders |
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Definition
- Vote
- Dividends
- Liquidation
- Preemption (usually with held from stockholders)
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Term
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Definition
| amount of stockholder's equity the stockholders have contributed to the corporation |
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Term
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Definition
| amount of stockholders' equity the corp. has earned through profitable operations and has not used for dividends |
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Term
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Definition
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Term
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Definition
| gives owners certain advantages over common stockholders |
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Term
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Definition
stock that is issued and is later reacquired
(purchased back by the company) |
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Term
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Definition
| amount is subtracted to determine total stockholders' equity |
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Term
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Definition
| what company gives back to stockholders; benefit of earnings |
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Term
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Definition
| most popular form of dividend |
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Term
| Process of issuing a dividend |
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Definition
- Declaration Date
- Date of Record
- Payment Date
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Term
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Definition
- increased number of shares and reduction in stock's par revenue
- used to reduce selling value
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Term
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Definition
| price a person can buy or sell a share of stock |
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Term
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Definition
| price company agrees to pay for stock - set when stock is issued |
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Term
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Definition
| company must pay preferred stockholder if it liquidates |
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Term
Book Value per share for preferred stockholders
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Definition
redemption value + dividends in arrears
number of shares of preferred outstanding |
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Term
| Book Value per share of common stock |
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Definition
total stockholder's equity - preferred equity
number of shares of common stock outstanding |
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Term
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Definition
measures use of assets to earn income for two groups who finance business
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Term
| Rate of Return on Total Assets |
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Definition
Net income + interest expense
average total assets |
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Term
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Definition
| the rate of return on common stockholder's equity |
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Term
| Rate of return on common stockholder's equity |
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Definition
net income - preferred dividends
average common stockholder's equity |
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