Classes of Stock

Classes of Stock - Legal capital No-par • Does not have a...

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Classes of Stock Common Basic form of common stock Have rights of ownership Benefit most of company succeeds Risk most if company does not succeed Preferred Have preference in receiving dividends and assets in case of liquidation Hybrid between common stock and debt Rare for corporations to issue Classes of Stock Par value Arbitrary amount assigned to share of stock In most states, represents minimum price for shares
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Unformatted text preview: Legal capital No-par • Does not have a par value • May have a stated value Learning Objective 2 Issuing Common Stock at Par • A company issues 100,000 shares of $5 par value common stock at par • The common stock account is always credited in the amount of the shares issued multiplied by par value...
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