文档介绍：CHAPTER
14
Long-Term Financing: An Introduction
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Chapter Outline
Stock
Corporate Long-Term Debt: The Basics
Preferred Stock
Patterns of Financing
Recent Trends in Capital Structure
Summary and Conclusions
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Stock
Par and No-Par Stock
Authorized versus mon Stock
Capital Surplus
Retained Earnings
Market Value, Book Value, and Replacement Value
Shareholders’ Rights
Dividends
Classes of Stock
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Par and No-Par Stock
The stated value on a stock certificate is called the par value.
Par value is an accounting value, not a market value.
The total par value (the number of shares multiplied by the par value of each share) is sometimes called the dedicated capital of the corporation.
Some stocks have no par value.
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Authorized vs. mon Stock
The articles of incorporation must state the number of shares mon stock the corporation is authorized to issue.
The board of directors, after a vote of the shareholders, may amend the articles of incorporation to increase the number of shares.
Authorizing a large number of shares may worry investors about dilution because authorized shares can be issued later with the approval of the board of directors but without a vote of the shareholders.
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Capital Surplus
Usually refers to amounts of directly contributed equity capital in excess of the par value.
For example, suppose 1,000 shares mon stock having a par value of $1 each are sold to investors for $8 per share. The capital surplus would be
($8 –$1) × 1,000 = $7,000
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Retained Earnings
Not many firms pay out 100 percent of their earnings as dividends.
The earnings that are not paid out as dividends are referred to as retained earnings.
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Market Value, Book Value, and Replacement Value
Market Value is the price of the stock multiplied by the number of shares outstanding.
Also known as Market Capitalization
Book Value
The sum of par value, capital surplus, and accumulated r