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Published by: beachsnow on Oct 26, 2013
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THE CORPORATE FORM OF ORGANIZATION Characteristics of Corporations A corporation is a business entity that is legally separate from its owners. Ownership in a corporation by its stockholders is evidenced by owning shares of stock. The owners are called stockholders. The following are important characteristics of corporations: • Stockholders have limited liability. Should the corporation go bankrupt the most a stockholder can lose is his investment. • Stockholders may transfer their shares to someone else. • Due to the limited liability feature of stock ownership, corporations can usually accumulate financing from stockholders more easily than other forms of business entities. • Corporations pay a corporate income tax, in addition to payroll taxes and property taxes. Dividends paid to stockholders are not tax-deductible for the corporation, but are taxable to the shareholder recipient of the dividend. Stockholders vote for a Board of Directors. The directors have ultimate control of the corporation, and must act in the best interest of the stockholders.

Basics of Capital Stock
Capital stock refers to any shares issued to obtain funding from owners. The following are important terms associated with capital stock. 1. Authorized stock—the total amount of stock that the charter authorizes for sale. a. Outstanding stock refers to issued stock held by stockholders. b. No formal journal entry is required for stock authorization; the number of shares authorized is disclosed in the financial statements. 2. Selling (issuing) stock—can be sold directly or indirectly to stockholders a. To sell directly, the corporation advertises its stock issuance to potential buyers. b. To sell indirectly, a corporation pays a brokerage house (investment banker) to issue its stock. c. A brokerage house may underwrite issuance (buy the stock from the corporation and take all gains or losses from its resale).

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a.3. 6. autres classes — société est parfois autorisée à émettre plus d'une catégorie d'actions. 4. 7. Recording stock options is explained in the Intermediate Accounting course. A déclaré stock valeur — non-par stock auquel est attribué une valeur « précisée » diluée par l'administration . 5. stock commun — stock est appelée common stock lorsque toutes les classes ont les mêmes droits et privilèges. b. influencé par les bénéfices futurs escomptés. b. 8. a. Formula Net Income – Preferred Stock Dividends / Weighted-avg. Classes d'a. Valeur marchande par action — le prix auquel un stock est acheté ou vendu. telles que des actions privilégiées. Propres fonds — a deux pièces a. # of common shares Market Price of Stock / Earnings per Share Dividends per Share / Market Price of Stock Stockholders’ Equity / Number of Common Shares Dividend yield Book value per share (common only) 2 . La valeur nominale stock — la société dans sa Charte attribue une valeur par action.Stock Options A stock option is a right to purchase common stock at a fixed price over a specified period of time. Shows the annual amount of cash dividends relative to the stock’s market value. croissance et autres compagnie et événements économiques.. Price-earnings ratio Indicates how much the market is willing to pay for a company’s earnings. imprimé sur le certificat d'actions. devient le capital légal minimal par action. valeur de marché actuelle des actions précédemment émises n'influe pas sur les comptes de capital des actionnaires de la société. établit le capital minimum légal. IMPORTANT EQUITY RATIOS The following table summarizes key equity ratios. capital versé (ou apport) — l'amo total. Stock sans désignation de valeur — ne pas assigné une valeur par action de la Charte de l'entreprise. How much equity each share of common stock owns.. Many corporations issue stock options to key employees. b. dividendes. Name Purpose Earnings per share The amount of income earned per each share of common stock.

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