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Financial Terms | |
Stock split |
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Definition of Stock splitStock splitOccurs when a firm issues new shares of stock but in turn lowers the current market price of its stock splitIssue of additional shares to firm’s stockholders.
Related Terms:Reverse stock splitA proportionate decrease in the number of shares, but not the value of shares of stock High priceThe highest (intraday) price of a stock over the past 52 weeks, adjusted for any stock splits. Last splitAfter a stock split, the number of shares distributed for each share held and the date of the Price/book ratioCompares a stock's market value to the value of total assets less total liabilities (book Price/earnings ratio (PE ratio)Shows the "multiple" of earnings at which a stock sells. Determined by dividing current Price/sales ratio (PS Ratio)Determined by dividing current stock price by revenue per share (adjusted for stock splits). ![]() Return on equity (ROE)Indicator of profitability. Determined by dividing net income for the past 12 Acquisition of stockA merger or consolidation in which an acquirer purchases the acquiree's stock. Adjustable rate preferred stock (ARPS)Publicly traded issues that may be collateralized by mortgages and MBSs. American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Auction rate preferred stock (ARPS)Floating rate preferred stock, the dividend on which is adjusted every Beta equation (Stocks)The beta of a stock is determined as follows: BOOK VALUE OF COMMON STOCKThe 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: capital stockOwnership shares issued by a business corporation. A business ![]() Capital StockThe total amount of plant, equipment, and other physical capital. Common stockThese are securities that represent equity ownership in a company. Common shares let an Common stockShares of ownership sold to the public. Common StockA financial security that represents an ownership claim on the common stockOwnership shares in a publicly held corporation. Common StockThat part of the capital stock of a corporation that carries voting rights and represents Common stock equivalentA convertible security that is traded like an equity issue because the optioned Common stock marketThe market for trading equities, not including preferred stock. Common stock/other equityValue of outstanding common shares at par, plus accumulated retained Common stock ratiosRatios that are designed to measure the relative claims of stockholders to earnings Conflict between bondholders and stockholdersThese two groups may have interests in a corporation that Consigned stocksInventories owned by a company, but located on the premises Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Convertible preferred stockPreferred stock that can be converted into common stock at the option of the holder. Cost of Common StockThe rate of return required by the investors in the common stock of Cost of Preferred StockThe rate of return required by the investors in the preferred stock of Cumulative preferred stockPreferred stock whose dividends accrue, should the issuer not make timely Departmental stocksThe informal and frequently unauthorized retention of excess inventory on the shop floor, which is used as buffer safety stock. Direct stock-purchase programsThe purchase by investors of securities directly from the issuer. Dividend yield (Stocks)Indicated yield represents annual dividends divided by current stock price. Earnings per share of common stockHow much profit a company made on each share of common stock this year. Employee stock fundA firm-sponsored program that enables employees to purchase shares of the firm's Employee stock ownership plan (ESOP)A company contributes to a trust fund that buys stock on behalf of Employee Stock Ownership Plan (ESOP)a profit-sharing compensation program in which investments are made in Employee Stock Ownership Plan (ESOP)A fund containing company stock and owned by employees, paid for by ongoing contributions by the employer. Exchange of stockAcquisition of another company by purchase of its stock in exchange for cash or shares. Floor stocksLow-cost, high-usage inventory items stored near the shop floor, Growth stockCommon stock of a company that has an opportunity to invest money and earn more than the Heavenly Parachute Stock OptionA nonqualified stock option that allows a deceased option holder’s estate up to three years in which to exercise his or her Incentive Stock OptionAn option to purchase company stock that is not taxable Income SplittingThis is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs. Income stockCommon stock with a high dividend yield and few profitable investment opportunities. Letter stockPrivately placed common stock, so-called because the SEC requires a letter from the purchaser Listed stocksstocks that are traded on an exchange. Listed stocksstocks that are traded on an exchange. Make-to-stockA production scheduling system under which products are completed Margin account (Stocks)A leverageable account in which stocks can be purchased for a combination of net realizable value at split-off allocationa method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary New York Stock Exchange (NYSE)Also known as the Big Board or The Exhange. More than 2,00 common No par value stockstock issued by the company that does not have an arbitrary value (par value) assigned to it. Non-cumulative preferred stockPreferred stock whose holders must forgo dividend payments when the Nonqualified Stock OptionA stock option not given any favorable tax treatment Outbound stock pointA designated inventory location on the shop floor between Philadelphia Stock Exchange (PHLX)A securities exchange where American and European foreign Preference stockA security that ranks junior to preferred stock but senior to common stock in the right to Preferred equity redemption stock (PERC)Preferred stock that converts automatically into equity at a Preferred stockA security that shows ownership in a corporation and gives the holder a claim, prior to the Preferred StockA type of equity security where holders have a claim on the assets Preferred stockA type of stock that usually pays a fixed dividend prior to any distributions preferred stockstock that takes priority over common stock in regard to dividends. Preferred stock agreementA contract for preferred stock. Preferred Stock Stock that has a claim on assets and dividends of a corporation that are priorto that of common stock. Preferred stock typically does not carry the right to vote. RATE OF RETURN ON STOCKHOLDERS’ EQUITYThe percentage return or profit that management made on each dollar stockholders invested in a company. Here’s how you figure it: RATIO OF DEBT TO STOCKHOLDERS’ EQUITYA ratio that shows which group—creditors or stockholders—has the biggest stake in or the most control of a company: Redeemable Preferred StockA preferred stock issue that must be redeemed by the issuing enterprise or is redeemable at the option of the investor. Considered a debt security for accountingpurposes. Repurchase of stockDevice to pay cash to firm's shareholders that provides more preferable tax treatment safety stocka buffer level of inventory kept on hand by a company in the event of fluctuating usage or unusual delays in lead time Safety stockExtra inventory kept on hand to guard against requirements Sales value at split-offA cost allocation methodology that allocates joint costs to joint sales value at split-off allocationa method of assigning joint cost to joint products that uses the relative sales values of the products at the split-off point as the proration basis; use of this method requires that all joint products SplitSometimes, companies split their outstanding shares into a larger number of shares. If a company with 1 Split deliveryThe practice of ordering large quantities on a single purchase order, Split Dollar Life InsuranceThe split dollar concept is usually associated with cash value life insurance where there is a death benefit and an accumulation of cash value. The basic premise is the sharing of the costs and benefits of a life insurance policy by two or more parties. Usually one party owns and pays for the insurance protection and the other owns and pays for the cash accumulation. There is no single way to structure a split dollar arrangement. The possible structures are limited only by the imagination of the parties involved. Split-fee optionAn option on an option. The buyer generally executes the split fee with first an initial fee, split-off pointthe point at which the outputs of a joint process are first identifiable or can be separated as individual products Split-off pointThe point in a production process when clearly identifiable joint costs Split-rate tax systemA tax system that taxes retained earnings at a higher rate than earnings that are Stated value stockstock issued by the company that does not have a par value, but does have a stated value. For accounting purposes, stated value is functionally equivalent to par value. StockOwnership of a corporation which is represented by shares which represent a piece of the corporation's STOCKCertificates that signify ownership in a corporation. A share of stock represents a claim on a portion of the company’s assets. StockSee inventory. StockUnits of ownership, also called shares, in a public corporation. Owners of such units, called shareholders, share in the earnings of the company through dividends. The price of a stock is determined by supply and demand in the stock market. StockAny item held in inventory. stock appreciation righta right to receive cash, stock, or a combination of cash and stock based on the difference between a specified dollar amount per share of stock and the quoted market price per share at some future date Stock certificateA document that identifies a stockholder’s ownership share in a corporation. Stock dividendPayment of a corporate dividend in the form of stock rather than cash. The stock dividend stock dividendDistribution of additional shares to a firm’s stockholders. Stock exchangesFormal organizations, approved and regulated by the Securities and Exchange Commission Stock index optionAn option in which the underlying is a common stock index. Stock marketAlso called the equity market, the market for trading equities. Stock optionAn option in which the underlying is the common stock of a corporation. stock optiona right allowing the holder to purchase shares of common stock during some future time frame and at a specified price Stock optionA right to purchase a specific maximum number of shares at a specific Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |