Understanding Corporate Finance Concepts

What does 'Capital stock' refer to?

• The total amount of common and preferred shares a company can issue

• The shares repurchased by the company

• The amount paid by investors for shares

• The profits retained by a company

What is Additional Paid-in Capital (APIC)?

• The total profits retained by a company

• The cumulative unrealized gains and losses

• The shares held in the company's treasury

• The amount paid for shares above their par value

What are Retained Earnings?

• The total amount of capital stock

• The amount paid above par value for shares

• Shares repurchased by the company

• Cumulative profits not distributed as dividends

What does Treasury Stock refer to?

• The total amount of common shares

• The unrealized gains and losses

• Cumulative profits retained by a company

• Shares that a company has repurchased

What does Accumulated Other Comprehensive Income (AOCI) represent?

• Retained earnings of the company

• The amount paid for shares above par value

• Total capital stock issued

• Cumulative unrealized gains and losses

If a company has a capital stock of $1,000,000, what does this mean?

• It has $1,000,000 in retained earnings

• It has $1,000,000 in unrealized gains

• It can issue shares worth $1,000,000

• It has repurchased $1,000,000 in shares

How is Additional Paid-in Capital (APIC) calculated?

• Total profits retained by the company

• Total shares issued minus par value

• Total capital stock issued

• Shares repurchased from investors

Why are Retained Earnings important for a company?

• They represent shares held in treasury

• They show unrealized gains and losses

• They indicate the total capital stock

• They can be reinvested for growth

What happens to Treasury Stock after repurchase?

• It increases the capital stock

• It can be reissued or retired

• It is distributed as dividends

• It is reported as retained earnings

Which of the following is NOT included in net income?

• Capital Stock

• Treasury Stock

• Retained Earnings

• Accumulated Other Comprehensive Income