A major new client has requested that your company present an investment seminar to illustrate the stock valuation process. As a result, your boss has asked you to analyze an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. You are to answer the following questions:
- What is the difference between common stock and preferred stock? What are some of the characteristics of each type of stock? In your opinion, which stock you rather buy.
- What is the difference between a publicly held company and a privately held company? How can the two types of companies be identified?
- What is classified stock? When "going public, why might a small company designate some stock currently outstanding as "founders' shares"?