Define (a) Capital stock, (b) Additional paid-in capital in excess of par, (c) Treasury stock, (d) Retained earnings, (e) Deficit, and (f) Accumulated other comprehensive income.View Solution: Define a Capital stock b Additional paid in capital in exce

Define (a) Capital stock, (b) Additional paid-in capital in excess of par, (c) Treasury stock, (d) Retained earnings, (e) Deficit, and (f) Accumulated other comprehensive income.View Solution: Define a Capital stock b Additional paid in capital in exce

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 1Q: Define each of the following terms: Weighted average cost of capital, WACC; after-tax cost of debt,...

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

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Define (a) Capital stock, (b) Additional paid-in capital in excess of par, (c) Treasury stock, (d) Retained earnings, (e) Deficit, and (f) Accumulated other comprehensive income.View Solution:
Define a Capital stock b Additional paid in capital in exce

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Define each of the following terms: Weighted average cost of capital, WACC; after-tax cost of debt, rd(1 – T); after-tax cost of short-term debt, rstd(1 – T) Cost of preferred stock, rps; cost of common equity (or cost of common stock), rs Target capital structure Flotation cost, F; cost of new external common equity, re
Which of the following is not a long term source of capital? a. Preferred stock b. Common stock c. Current liabilities. d. Long-term debt
The term capital structure refers to_______ O a. Long-term debt, preferred stock, and common stock equity O b. Current assets and current liabilities O c. Shareholders' equity O d. Total assets minus liabilities
Which is a component of stockholder's equity? a. Sinking funds b. Deferred charges c. Accumulated other comprehensive income d. Realized capital
a) return on equity b) return on assests c) return on capital
Stockholders' equity consists of which of the following? Multiple Choice Paid-in (or contributed) capital and retained earnings. Retained earnings and cash. Long-term assets. Paid-in (or contributed) capital and par value. Premiums and discounts. k
. If common stock is issued for an amount greater than par value, the excess should be credited to Cash. Retained Earnings. Paid-in Capital in Excess of Par. Legal Capital
Which of the following may take the form of dividend income and/or capital appreciation? a. bond investments b.gain from an investment c.equity investments d.expected rate of return
Debt in the capital structure could be treated as if it were common stock in the weighted average cost of capital if debt was: a. participating b. callable c. convertible d. cumulative
Which is a correct statement below? A. Equity is the residual interest in the liabilities of the entity after deducting all of its assets.B. Subscriptions receivable shall preferably be reflected as a deduction from the related subscribed share capital.C. Share premium is also known as capital stock.D. A deficit is a credit balance in retained earnings.
Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold
Define the following terms.(a) Basic earnings per share.(b) Potentially dilutive security.(c) Diluted earnings per share.(d) Complex capital structure.(e) Potential common stock.