|Cost of Common Stock|
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Definition of Cost of Common Stock
Cost of Common Stock
The rate of return required by the investors in the common stock of
Same as the cost of common stock. Sometimes viewed as the
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
a cost accumulation and reporting
A methodology under which all manufacturing costs are assigned
Schedule of depreciation rates allowed for tax purposes.
A merger or consolidation in which an acquirer purchases the acquiree's stock.
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
A relatively new method advocated for the
a process using multiple cost drivers to predict and allocate costs to products and services;
A cost allocation system that compiles costs and assigns
The actual expenditure made to acquire an asset, which includes the supplierinvoiced
a valuation method that uses actual direct
Publicly traded issues that may be collateralized by mortgages and MBSs.
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
Aggressive Cost Capitalization
cost capitalization that stretches the flexibility within generally
Total costs, explicit and implicit.
American Stock Exchange (AMEX)
The second-largest stock exchange in the United States. It trades
cost of a security adjusted for the amortization of any purchase premium or
a quality control cost incurred for monitoring
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
Auction rate preferred stock (ARPS)
Floating rate preferred stock, the dividend on which is adjusted every
Average-Cost Inventory Method
The inventory cost-flow assumption that assigns the average
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
costs that are identifiable with and able to be influenced by decisions made at the business
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
A cost that is incurred when a group of products or services are produced,
a cost that is caused by a group of things
Beta equation (Stocks)
The beta of a stock is determined as follows:
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals:
a planned expenditure
Capital Cost Allowance (CCA)
The annual depreciation expense allowed by the Canadian Income Tax Act.
Ownership shares issued by a business corporation. A business
The total amount of plant, equipment, and other physical capital.
capitalization of costs
When a cost is recorded originally as an increase
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
costs that increase with increases in the level of investment in current assets.
the total variable cost of carrying one unit of
The cost of holding inventory, which can include insurance,
costs of maintaining current assets, including opportunity cost of capital.
The amount of cash expended.
Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the
a cost related either to the long-term investment
The representing of accounting information over multiple years as percentages
common body of knowledge (CBK)
the minimum set of knowledge needed by a person to function effectively in a particular field
An agreement between two or more countries that permits the free movement of capital
Are equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends.
common-size balance sheet
Balance sheet that presents items as a percentage of total assets.
common-size income statement
Income statement that presents items as a percentage of revenues.
These are securities that represent equity ownership in a company. common shares let an
Shares of ownership sold to the public.
A financial security that represents an ownership claim on the
Ownership shares in a publicly held corporation.
That part of the capital stock of a corporation that carries voting rights and represents
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
Common stock market
The market for trading equities, not including preferred stock.
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings
company cost of capital
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
Inventories owned by a company, but located on the premises
a cost over which a manager has the ability to authorize incurrence or directly influence magnitude
Refers to the sum of manufacturing direct labor and overhead
the total of direct labor and overhead cost;
Convertible exchangeable preferred stock
Convertible preferred stock that may be exchanged, at the
Convertible preferred stock
Preferred stock that can be converted into common stock at the option of the holder.
A resource sacrificed or forgone to achieve a specific objective (Horngren et al.), defined
the cash or cash equivalent value necessary to attain an
The expense incurred to create and sell a product or service. If a product is not
a discipline that focuses on techniques or
Cost Accounting Standards Board (CASB)
a body established by Congress in 1970 to promulgate cost accounting
the approach to product costing that determines
the assignment, using some reasonable basis,
the practice of finding acceptable alternatives
An asset’s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc.
The idea that fixed costs and variable costs react differently to changes in the volume of
The calculation and comparison of the costs and benefits of a policy or project.
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
The net present value of an investment divided by the investment's initial cost. Also called
a responsibility center in which the manager has
A division or unit of an organization that is responsible for controlling costs.
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
a company-wide attitude about the topics
the practice of minimizing, to the extent
The process of either reducing costs while maintaining the same level of productivity or maintaining costs while increasing productivity.
cost control system
a logical structure of formal and/or informal
A method of expensing the cost of a resource consumed by first determining
The most significant cause of the cost of an activity, a measure of the demand for an activity
a factor that has a direct cause-effect relationship
A factor that directly impacts the incidence of a cost, and which is generally
cost driver analysis
the process of investigating, quantifying,
cost leadership strategy
a plan to achieve the position in a
cost management system (CMS)
a set of formal methods
Anything for which a measurement of cost is required – inputs, processes, outputs or responsibility centres.
An item for which a cost is compiled. For example, this can be a product,
Cost of capital
The required return for a capital budgeting project.
Cost of capital
The costs incurred by an organization to fund all its investments, comprising the risk-adjusted
cost of capital
Refers to the interest cost of debt capital used by a business
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