AFM101 Chapter Notes - Chapter 12: Pro Rata, Financial Statement, Stock Split

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Donna Psutka

Document Summary

Notes on chapter 12 reporting and interpreting owners" equity. Notice of annual meeting is accompanied by a management information (or proxy) circular contains pages of info concerning people nominated to be members of the board of directors, also includes a proxy card. Maximum number of shares it can sell to public is authorized number (oftentimes unlimited) Outstanding shares is total number f shares owned by shareholders on any particular date. Eps = profit available to common shareholders / average number of common shares outstanding. Investors expect a large eps number for companies with higher stock prices. Common shares are known as residual equity. Par value is nominal value per share established in the charter of a corporation; basis for legal capital. No par value shares don"t have nominal value. Legal capital is the permanent amount of capital, defined y law, that must remain invested in the business it serves as a cushion for creditors.