Corporate Financial Structure Flashcards Preview

A Wiley Review Notes REG > Corporate Financial Structure > Flashcards

Flashcards in Corporate Financial Structure Deck (17)
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1
Q

Stock provisions which must be authorized by the Articles of Incorporation must include

A
Number of Authorized shares
Whether stocks are Par or No Par value
Classes of stock
Voting rights
Dividend provisions
2
Q

In order to convert preferred shares to common

A

It must be stated in the articles of incorporation

3
Q

A corporation may resell treasury shares

A

without regards to par value. Buyer will not have additional liability

4
Q

In many states a shareholder who owns common stock is liable to a creditors

A

if they paid less that par value in connection with original issue. Liability is difference between paid and par value

5
Q

A promise to perform services is valid consideration

A

as long as it is for at least par value

6
Q

If a corporation accepts an offer to buy stock subscriptions

A

the subscriber becomes liable for the purchase. owner becomes liable if paid less that full amount

7
Q

What are examples of corporate debt securities

A

1) Registered Bonds
2) Bearer Bonds
3) Debenture Bonds
4) Mortgage Bonds
5) Redeemable Bonds
6) Convertible Bonds

8
Q

A warrant

A

is NOT corporate debt BUT IS a stock option to purchase a number of shares at a certain time.

9
Q

Liquidating Dividends

A

represent a return of the stockholder’s capital and considered a Capital Distribution.

10
Q

Both Cash and Property distribution

A

Are asset distributions.

11
Q

Property distribution is recorded

A

At FMV at date of transfer

12
Q

What is Ultra Vires Acts

A

Acts beyond the scope of the powers of the corporation

13
Q

Treasury Stocks

A

Issued stocks that are no longer outstanding because company repurchased them

14
Q

Characteristics of treasury stocks

A

Do not receive Dividends and are NOT Votable

15
Q

A corporation by law may

A

issue one or more classes of Common Stock and preferred stock

16
Q

Difference between holders of stock securities and debt securities

A

Stock Securities = Owners of the corporation

Debt Securities = Creditors of the corporation

17
Q

What is Watered Stock

A

Stock that is acquired by exchanging cash or property worth less than the par or stated value of the stock.

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