Shareholders’ Equity
Recall that debt (on the liabilities side of the balance sheet) represents one major source of funds for companies. Shareholders’ equity represents another major source of funds (Exhibit 6.19) via:
Issuance of equity
Operations
| Preferred Stock | Stock that has special rights and takes priority over common stock |
| Common Stock Par Value | Par value of units of ownership of a corporation |
| Additional Paid-In Capital (APIC) | Represents capital received by a company when its shares are sold above their par value |
| Treasury Stock | Common stock that had been issued and then reacquired (bought back) by a company |
| Retained Earnings | Total amount of earnings of a company since its inception minus dividends and losses (if any) |
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