stockholder

(noun)

One who owns stock.

Related Terms

Examples of stockholder in the following topics:

  • Accounting for Preferred Stock

    • diluting the common stockholders' control of the corporation, since preferred stockholders usually have no voting rights.
    • Stock preferred as to dividends means that the preferred stockholders receive a specified dividend per share before common stockholders receive any dividends.
    • Usually, stockholders receive dividends on preferred stock quarterly.
    • The company would pay the preferred stockholders dividends of USD 20,000 (USD 10,000 per year times two years) before paying any dividends to the common stockholders.
    • Preferred stockholders receive the par value (or a larger stipulated liquidation value) per share before any assets are distributed to common stockholders.

  • Corporations

    • A corporation has limited liability.Stockholders own the corporation, and they are not liable for a corporation's debt.If a corporation fails, subsequently, the stockholders only lose their investment, the amount of common stock that they had purchased.
    • Stockholders can easily transfer corporate ownership.Stocks are certificates that represent ownership in a corporation, and stockholders can freely buy or sell stock to other investors through the stock market.
    • Stockholders do not have a mutual agency relationship, where the stockholders cannot bind a corporation to contracts.Stockholders have no say in the daily operation of the corporation even though they own the corporation.
    • Cumulative Preferred Stock – a corporation must pay past-due dividends to cumulative preferred stockholders before it pays dividends to common stockholders.Stockholders only receive dividends, when the board of directors declares them.
    • Convertible Stock – a stockholder can convert preferred stock into common stock on a specific date in the future.

  • Dividend Irrelevance Theory

    • Under perfect market conditions, stockholders would ultimately be indifferent between returns from dividends or returns from capital gains.
    • However, the total return from both dividends and capital gains to stockholders should be the same.
    • If dividends are too small, a stockholder can simply choose to sell some portion of his stock.
    • Therefore, if there are no tax advantages or disadvantages involved with these two options, stockholders would ultimately be indifferent between returns from dividends or returns from capital gains.

  • The Statement of Equity

    • The statement of equity (and similarly the equity statement, statement of owner's equity for a single proprietorship, statement of partner's equity for a partnership, and statement of retained earnings and stockholders' equity for a corporation) are basic financial statements.
    • Retained earnings are part of the balance sheet under "stockholders equity (shareholders' equity)" and is mostly affected by net income earned during a period of time by the company minus any dividends paid to the company's owners and stockholders.

  • Control and Preemption

    • A shareholder or stockholder is an individual or institution (including a corporation) that legally owns a share of stock in a public or private corporation.
    • Stockholders are granted special privileges depending on the class of stock.

  • Introduction to the Retained Earning Statement

    • The Statement of Shareholder's Equity is also known as the Equity Statement, Statement of Owner's Equity (single proprietorship), Statement of Partner's Equity (partnership), and Statement of Retained Earnings and Stockholders' Equity (corporation).
    • Generally, retained earnings are the accumulated net income of the corporation (proprietorship or partnership) minus dividends distributed to stockholders.
    • Retained earnings are part of the balance sheet under Stockholders Equity (Shareholders Equity) and are mostly affected by net income earned by the company during a specified period, less any dividends paid to the company's owners/stockholders.

  • Answers to Chapter 7 Questions

    • Furthermore, the bondholders do not vote at a corporation's stockholders meeting and thus, do not compete with the stockholders over control of a corporation.
    • Consequently, stockholders could earn a higher dividend if a corporation uses bonds to expand operations.

  • Accounting Considerations

    • Retained earnings are part of the balance sheet (another basic financial statement) under "stockholders equity (shareholders' equity). " It is mostly affected by net income earned during a period of time by the company less any dividends paid to the company's owners/stockholders.
    • On the date of payment, when dividend checks are mailed out to stockholders, the dividends payable account is debited and the firm's cash account is credited.
    • If a firm authorizes a 15% stock dividend on Dec 1st, distributable on Feb 29, and to stockholders of record on Feb 1, the stock currently has a market value of $15 and a par value of $4.

  • Performance per Share

    • The below ratios describe the value of shares of stock to stockholders, both in terms of dividends and their general ownership value:
    • Dividend Yield ratio shows the earnings distributed to stockholders related to the value of the stock, as calculated on a per-share basis.
    • Dividend Payout ratio shows the portion of earnings distributed to stockholders.
    • Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends: Dividend Payout Ratio = Dividends / Net Income for the Same Period.

  • Profit and Stakeholders

    • In the traditional view of the firm, the stockholders are the owners of the company, and the firm has a binding fiduciary duty to put their needs first and to increase value.
    • In the field of corporate governance and corporate responsibility, a major debate is ongoing about whether the firm or company should be managed for stakeholders, stockholders (called "shareholders"), or customers.
    • For instance, by simultaneously addressing customer wishes in addition to employee and stockholder interests, both of the latter two groups also benefit from increased sales.
    • Supporters also take issue with the preeminent role given to stockholders by many business thinkers, especially in the past.
    • These normative arguments would matter little if stockholders had complete control in guiding the firm.