Bond and Stocks Financing
Financing thru Stocks
Stocks are the owned capital of a business and that it is considered a permanent investment.
Stockholders are people who invest in stocks and their ownership in the corporation is evidenced by a stock certificate.
Stocks may be obtained thru: * Subscription * Purchase * Issuance of stock dividends
Almost all of the initial capital of the corporation including a large segment of the future capital comes from the sale of stock.
Stock Financing * Refers to the procurement of corporate funds through the sale of shares of stocks to prospective investors * It is a method of financing by increasing the equity capital.
Major Classification of Stocks
Authorized capital stock, capital; and capitalization Authorized capital stock- is the total amount of stocks of all classes authorized in the certificate of incorporation. * It may consist of the issued stocks and the un-issued stock of the corporation.
Capital stock- represents the actual amount of stocks of all classes which are issued and outstanding any time and not necessary the total amount of authorized capital stock, a large part of which is un-issued.
Capital- depends on whose point of view it is being defined.
To accountants- capital refers to the total ownership of the business which is obtained by deducting the total liabilities from the total assets.
To businessman- capital refers to all assets of the business regardless of where it came from whether equity capital or borrowed money.
To economist- capital would be all productive assets used in the business excluding non-productive assets
Capitalization- refers to the sum of the face or par value of all outstanding stocks and bonds issued by the corporation. In case of no par value stocks the value carried in the balance sheet will be used. This can be computed by adding to the capital stock all bonded indebtedness issued by the corporation.
Un-issued capital stock – this is a portion of the
Stocks are the owned capital of a business and that it is considered a permanent investment.
Stockholders are people who invest in stocks and their ownership in the corporation is evidenced by a stock certificate.
Stocks may be obtained thru: * Subscription * Purchase * Issuance of stock dividends
Almost all of the initial capital of the corporation including a large segment of the future capital comes from the sale of stock.
Stock Financing * Refers to the procurement of corporate funds through the sale of shares of stocks to prospective investors * It is a method of financing by increasing the equity capital.
Major Classification of Stocks
Authorized capital stock, capital; and capitalization Authorized capital stock- is the total amount of stocks of all classes authorized in the certificate of incorporation. * It may consist of the issued stocks and the un-issued stock of the corporation.
Capital stock- represents the actual amount of stocks of all classes which are issued and outstanding any time and not necessary the total amount of authorized capital stock, a large part of which is un-issued.
Capital- depends on whose point of view it is being defined.
To accountants- capital refers to the total ownership of the business which is obtained by deducting the total liabilities from the total assets.
To businessman- capital refers to all assets of the business regardless of where it came from whether equity capital or borrowed money.
To economist- capital would be all productive assets used in the business excluding non-productive assets
Capitalization- refers to the sum of the face or par value of all outstanding stocks and bonds issued by the corporation. In case of no par value stocks the value carried in the balance sheet will be used. This can be computed by adding to the capital stock all bonded indebtedness issued by the corporation.
Un-issued capital stock – this is a portion of the