MGMT 1B Lecture Notes - Lecture 6: Treasury Stock, Initial Public Offering, Preferred Stock
Document Summary
Major components of owners equity: contributed capital, drawings, expense, revenue. Debt holders get paid before stockholders (bonds before stock) Preferred stock- has preference as to dividends and assets in the event of liquidation. Common stock- (at par or stated value) Additional paid in capital (in excess of par or stated value): aka apic; additional amount above the face value. Debt paid in order of seniority: first senior bonds, then junior jebt (subordinated debt) and then junk bonds. Beginning retained earnings + net income- dividends= ending retained earnings. Additional paid in capital (apic) + common stock replaces contributed capital in a publicly traded company (drawings become dividends) Convertible bonds: could convert bond into shares of stock. Authorized: total number of shares that may be issued by a corporation, specified by the articles of incorporation (entire number that could be issued) ex. )
