1. Corporate Stocks: Assignments
Chapter 21
Corporate Stocks: Assignments

2. © 2009 South-Western, a part of Cengage Learning

3. Stock exchange Corporation Stock broker Capital stock Commission
T E R M S
Corporate Stocks and Stock Transactions
Corporation
Capital stock
Charter
Stock certificate
Par
No-par stock
Stock exchange
Stock broker
Commission
Total cost
Proceeds 1
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4. Figure 21.1 Daily Stock Report from the NYSE
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5. Stock Transactions 1
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6. Figure 21.2 Confirmation Report of a Stock Purchase
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7. Round Lot Odd Lot T E R M S Round and Odd Lots Usually is 100 shares.
Consists of any number of shares less than 100 (1 to 99 shares is an odd lot for a stock with a 100-share round lot).
When odd lots are purchased, a small extra charge, or odd-lot differential, is commonly added to the round-lot price. The differential is added to the price for a purchaser and deducted from the price for the seller. 2
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8. Computing the Costs and Proceeds of Round and Odd Lots2
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9. Board of Directors Dividend Rate T E R M S Corporate Oversight
A group of people elected by shareholders to oversee the operations of the corporation.
The board has sole authority to distribute the firm’s earnings (to declare a dividend) to the shareholders.
Dividend Rate
A certain percent of the par value of the stock or a flat amount of money per share 3
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10. Computing the Rate of Yield and Gains or Losses3
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11. Convertible Preferred Stock
T E R M S
Types of Stocks and Dividends
Common Stock
The usual type of stock issued by a corporation.
Preferred Stock
Gives holders a right to share in earnings and liquidation before common shareholders do. A firm must first pay dividends to the holders of preferred stock before anything is paid to the holders of its common stock.
May be designated as cumulative—if the firm doesn’t pay the specified dividend, the unpaid amount (dividend in arrears), carries over to the following year or years.
Convertible Preferred Stock
Can be converted into a stated number of common shares 4
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12. Computing Comparative Earning Potential
E X A M P L E
Computing Comparative Earning Potential 4
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13. Computing Comparative Earning Potential (cont’d)
E X A M P L E
Computing Comparative Earning Potential (cont’d) 4
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14. Assignment 21.1: Buying and Selling Stock
For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places.
© 2009 South-Western, a part of Cengage Learning

15. Assignment 21.1: Buying and Selling Stock
For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places.
© 2009 South-Western, a part of Cengage Learning

16. Assignment 21.1: Buying and Selling Stock
For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places.
© 2009 South-Western, a part of Cengage Learning

17. Assignment 21.1: Buying and Selling Stock
For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places.
© 2009 South-Western, a part of Cengage Learning

18. Assignment 21.1: Buying and Selling Stock
Solve the following problems.
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19. Assignment 21.1: Buying and Selling Stock
Solve the following problems.
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20. Assignment 21.1: Buying and Selling Stock
Solve the following problem.
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21. Assignment 21.1: Buying and Selling Stock
Solve the following problem.
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22. Assignment 21.1: Buying and Selling Stock
Solve the following problems.
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23. Assignment 21.2: Capital Stock
The information in problem 1 also applies to problems 2 and 3.
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24. Assignment 21.2: Capital Stock
The information in problem 1 also applies to problems 2 and 3.
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25. Assignment 21.2: Capital Stock
Solve the following problems.
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26. Assignment 21.2: Capital Stock
Solve the following problems.
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27. Assignment 21.2: Capital StockB
Do not consider commission in the following problems.
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28. Assignment 21.2: Capital StockB
Do not consider commission in the following problems.
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29. Assignment 21.2: Capital StockB
Do not consider commission in the following problems.
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30. Assignment 21.2: Capital StockB
Do not consider commission in the following problems.
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31. Assignment 21.2: Capital StockB
Do not consider commission in the following problems.
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32. Chapter Terms for Review
board of directors
capital stock
charter
common stock
convertible preferred stock
corporation
cumulative preferred stock
declare a dividend
dividend in arrears
no-par stock
odd lot
odd-lot differential
par
preferred stock
price/earnings ratio (P/E)
proceeds (from sale of stock)
rate of yield
round lot
stockbroker
stock certificate
stock exchanges
stock transactions
total cost (for purchaser of stock)
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