The Balance Sheet Caption for Common Stock Is

question 43

Essay

The balance sheet caption for common stock is:
Common stock, $10 par value, 14,000,000 shares authorized, 11,400,000 shares issued, 11,000,000 shares outstanding.
(a.)Calculate the dollar amount that will be presented opposite of this caption.
(b.)Calculate the total amount of a cash dividend of $1.00 per share.
(c.)What accounts for the difference between issued shares and outstanding shares?

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Definitions:

Expected Return

The forecasted amount of profit or loss an investment is projected to generate, expressed as a percentage of the total invested capital.

Portfolio Weight

The percentage composition of a particular holding in relation to the total value of the portfolio, used to assess diversification and risk.

Security Market Line

A graphical representation in financial market theory that depicts the relationship between risk (measured as beta) and expected return for the entire market.

Beta

A way of measuring the level of erratic behavior, or systemic threat, in a security or investment group in perspective of the general market.