Match each of the following terms with the correct definition: a. additional paid-in capital b. issued and outstanding c. retained earnings d. treasury stock e. authorized share capital f. par value Correct Definitions: A. The price at which each share is recorded in the company’s books B. Held by investors C. Cumulative amount of profits that have been plowed back D. The difference between the amount of cash raised by an equity issue and the par value of the issue E. The maximum number of shares that can be issued without shareholder approval F. The amount that the company has spent buying back stock that it has not subsequently resold

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 36MCQ
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Match each of the following terms with the correct definition:
a. additional paid-in capital
b. issued and outstanding
c. retained earnings
d. treasury stock
e. authorized share capital
f. par value

Correct Definitions:
A. The price at which each share is recorded in the company’s books
B. Held by investors
C. Cumulative amount of profits that have been plowed back
D. The difference between the amount of cash raised by an equity issue and the par value of the issue
E. The maximum number of shares that can be issued without shareholder approval
F. The amount that the company has spent buying back stock that it has not subsequently resold


SELECTED FORMULAS

PVIFA =

PVIF =

requity = rassets + (rassets – rdebt)

PV of tax shield = = Tc *D
WACC = (1-Tc) * *() + *()

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