Matching Quiz

Match the terms listed below, with the appropriate desciption from the list on the right.


1				Authorized shares


2				Book value per common share


3				Book value per preferred share


4				Call price


5				Callable preferred shares


6				Common shares


7				Contributed capital


8				Convertible preferred shares


9				Cumulative preferred shares


10				Date of declaration


11				Date of payment


12				Date of record


13				Deficit


14				Dividend in arrears


15				Dividend preference


16				Equity financing


17				Financial leverage


18				Market value per share


19				Non-cumulative preferred shares


20				No par value


21				Non-participating preferred shares


22				Organization costs


23				Outstanding shares


24				Par value


25				Participating preferred shares


26				Preemptive right


27				Preferred shares


28				Privately held shares


29				Progressive tax


30				Proxy


31				Publicly held shares


32				Public sale


33				Retained earnings


34				Sell shares directly


35				Sell shares indirectly


36				Share


37				Share capital


38				Shareholder(s)


39				Shareholders' equity


40				Statement of retained earnings


41				Underwrite

Answer choices for questions 1 through 41

A)	The amount that must be paid to call and retire a preferred share.
B)	Shares of a corporation when there is only one class of shares.
C)	Preferred shares on which dividends are limited to a maximum amount each year.
D)	The number of shares held by shareholders.
E)	The owners of a corporation.
F)	The total number of shares that a corporation's charter authorizes it to sell. Federally incorporated companies are authorized to issue an unlimited number.
G)	The amount of shareholders' equity applicable to preferred shares (equals the preferred share's call price or issue price if the preferred share is not callable, plus any cumulative dividends in arrears) divided by the number of preferred shares outstanding.
H)	Obtaining capital, or money, by issuing shares.
I)	When a corporation offers its shares to only a few shareholders; shares are not for public sale; also called closely held shares.
J)	Higher levels of income are taxed at higher rates and lower levels of income are taxed at lower rates.
K)	The recorded amount of shareholders' equity applicable to common shares divided by the number of common shares outstanding.
L)	The total amount of cash and other assets received by the corporation from its shareholders in exchange for common and/or preferred shares.
M)	An arbitrary value a corporation places on each of the corporation's shares.
N)	Preferred shares on which the right to receive dividends is lost for any year that the dividends are not declared.
O)	A class of shares that has not been assigned a par value by the corporate charter.
P)	Preferred shares with a feature that allows preferred shareholders to share with common shareholders in any dividends paid in excess of the percent stated on the preferred shares.
Q)	Refers to trading in an organized stock market.
R)	The equity of a corporation; also called corporate capital.
S)	Shares that give their owners a priority status over common shareholders in one or more ways, such as the payment of dividends or the distribution of assets on liquidation.
T)	The cumulative net income less losses and dividends retained by a corporation.
U)	When a corporation pays a brokerage house (investment banker) to issue its shares.
V)	One unit of ownership in a corporation.
W)	Refers to all types (or classes) of a corporation's shares; also called capital stock.
X)	When a corporation advertises its shares' issuance directly to potential buyers. This is most common with privately held corporations.
Y)	An unpaid dividend on cumulative preferred shares; it must be paid before any current dividends on the preferred shares and before any dividends on the common shares are paid.
Z)	A financial statement unique to the corporate form of organization that reconciles retained earnings for the period by taking retained earnings at the beginning of the period, plus net income for the period (or less net loss), less dividends declared for the period, to arrive at retained earnings at the end of the period.
AA)	Preferred shares that the issuing corporation, at its option, may retire by paying a specified amount (the call price) to the preferred shareholders plus any dividends in arrears.
AB)	Arises when a corporation has a debit (abnormal) balance for retained earnings.
AC)	The costs of bringing a corporation into existence, including legal fees, promoters' fees, and amounts paid to the incorporating legal jurisdiction.
AD)	Preferred shares that give holders the option of exchanging their preferred shares for common shares at a specified rate.
AE)	The future date specified by the directors for identifying those shareholders listed in the corporation's records to receive dividends.
AF)	When a corporation offers its shares for public sale, which can result in thousands of shareholders.
AG)	Preferred shares on which undeclared dividends accumulate until they are paid; common shareholders cannot receive a dividend until all cumulative dividends have been paid.
AH)	The rate per share at which dividends are paid when declared.
AI)	When a brokerage house buys the shares from the corporation and takes all gains or losses from its resale to shareholders.
AJ)	Achieving an increased return on common shares by paying dividends on preferred shares or interest on debt at a rate that is less than the rate of return earned with the assets that were invested in the corporation by the preferred shareholders or creditors.
AK)	The price at which stock is bought or sold.
AL)	A legal document that gives an agent of a shareholder the power to exercise the voting rights of that shareholder's shares.
AM)	The right to purchase additional shares of common shares issued by the corporation in the future.
AN)	The date the directors vote to pay a dividend.
AO)	The date when shareholders receive the dividend payment.

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