Discussion for Intermediate 111

Discussion for Intermediate 111 - Capital stock is an...

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Capital stock is an important area of a corporation’s equity section. Generally the term “capital stock” embraces common and preferred stock issued by a corporation. REQUIRED: 1. What are the basic rights inherent in ownership of common stock, and how are they exercised? 2. What is preferred stock? Discuss the various preferences afforded preferred stock. Capital stock are shares that stockholders own from a corporation. There are two type of capital stock which are common and preferred stock which will be discuss later in this posting. Stockholders Rights When dividened are declared then stockholders has rights to profit sharing. Stockholders can establish corporate polices and also elect directors for the corporation. If more stock is issued then stockholders have the right to maintain proportionate interest in ownership. So they purchase pro rate share of the additional stock. When liquidations happen stockholders share in distribution of assets of the coporation. Common stock gives stockholders all the rights listed above. When a stockholders
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This note was uploaded on 10/04/2011 for the course ACC 302 taught by Professor Peoples during the Spring '11 term at Kaplan University.

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Discussion for Intermediate 111 - Capital stock is an...

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