Problem 1. As an investor, would you prefer a stock dividend, cash dividend or stock split? Why? How do each of these impact a company's financial statement? What are some benefits of a stock split for a company? What are some benefits for an investor? Why would a company choose one over the other?
Problem 2. Should an organization issue common stock, preferred stock, or bonds to raise capital? Why? As an investor, how would you prefer to see a company raise capital? Why? As a corporation, would you rather issue preferred or common stock? Why?
Problem 3. Why do companies offer stock options? Should stock option compensation be included as an expense when calculating an organization's net income? Why or why not? If so, how should the amount of expense be calculated?