AFM102 Lecture Notes - Lecture 10: Retained Earnings, Financial Statement
15 Oct 2015
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If you incorporate, you must create common shares (common shares) Some still have contributed surplus : common shares- receive proportionate share of common dividends (one vote for board of directors, receive annual financial statements. Good news with common shares is that you participate in the growth of the company. Declaration date: date the board of directors meet and declare the dividend (creates a liability to pay) Date of record: if you hold shares on this date, you"re entitled to the dividends. On february 19th, abcs board declares a dividend of /share to be paid on march 8th to shareholders of record on march 1st. No r/e then no dividends by law (assume 25,000 shares outstanding) Example: for every share that you own you"ll get 2 for 1, 3 for 1, or reverse 1 for 10. The purpose of this is to get the share price into a preferable dollar range usually - range.
