Chapter 10, Problem 10.40BE

(Learning Objective 1: Identify key terms associated with corporations) Complete each of the following statements with one of the terms listed here.

Charter	Corporation	Double taxation
Limited liability	Liquidation	Paid-in capital
Par value	Preemption	Preferred stock
Retained earnings	Share of capital stock	Stockholders

1. a. _____ represents the amount of stockholders’ equity that the corporation has earned through profitable operations less any
2. b. dividends declared.
3. c. The owners of the corporation are called _____.
4. d. One disadvantage of the corporate form of organization is ___ .
5. e. _____ is a hybrid form of capital stock resembling both equity and debt that pays a fixed dividend.
6. f. The basic unit of ownership for a corporation is one ______.
7. g. The authorization from the state to issue a certain number of shares of stock is granted through the corporation’s _______.
8. h. The right to receive a proportionate share of any assets remaining after the corporation goes out of business, sells its assets, and pays off its liabilities is the right of ______.
9. i. The business entity formed under state law that has a separate legal identity from its owners is a ______.
10. j. The amount of stockholders’ equity that the stockholders have contributed to the corporation is called ________.
11. k. The arbitrary amount assigned to each share of stock when it is originally authorized is its ____.
12. l. _____ is the legal concept that means stockholders can lose no more than the cost of their investment in the company.
13. m. The right to maintain one's proportionate ownership in the corporation is the right of _____.