quiz 10

how is the stockholders' equity section of the balance sheet different from the statement of stockholders' equity?

the balance sheet provides informational about stockholders' equity on a specific date and the equity statement provides details about how the total amount of stockholders equity changed between the time the last balance sheet was prepared

explain the difference between authorized, issued, and outstanding shares

- authorized is the total number of shares available to sell - issued is the number of shares that have been sold to investors - outstanding is the number of issued shares repurchases by the company

what are the basic ownership rights of common stockholders?

- right to vote - right receive dividends - rights to share in the distribution of assets

what is the difference between a public and private corporation? provide an example of each.

a private corporation normally has fewer stockholders that stock gets issued to and isn't offered to the public; however, public corporation is authorized to sell their stock to the public.

describe the primary advantages and disadvantages of a corporation.

advantages - are limited liability and the ability to raise capital disadvantages - additional taxes and more paperwork

explain why preferred stock often is said to be a mixture of attributes somewhere between common stock and bonds.

because preferred shares share the characteristics of both common stock and debt represented by bonds.

what would motivate a company to buy back its own stock?

equity value increases