ACCTMIS 2200 Lecture 14: 14. Equity Financing Lecture

• School: Ohio State University
• Department: Accounting and Management Info
• Course: ACCTMIS 2200
• Professor: Marc Smith

Document Summary

Contributed capital - this is the amount that owners have contributed through the purchase of stock. Retained earnings - this is the net income earned by the company not paid out as dividends i. Has divided preference - means if a dividend is paid the preferred stockholders must be paid in full before common stockholders can receive a dividend. The preferred stock dividend is set at a fixed percentage. Preferred stockholders typically do not have voting rights ii. iii. Dividend rates are determined by the board of directors based on the corporation"s profitability. Receive dividends after preferred stockholders a. b. c. A monetary amount assigned to each class of stock for accounting purposes only. When stock is sold to owners (stockholders), the stock account is only recorded at par value. The excess of the selling price of the stock over the par value is recorded in the equity account called: iii.