Problem
A. Explain why corporations issue stocks. Are corporations required to pay dividends? Explain. Why do corporations pay dividends? What are retained earnings, and why are they important. Explain your answer.
B. Describe the difference between common and preferred stocks. Why do corporations sell preferred stocks? Explain your answer.
C. Review the stockholders' equity section of the balance sheet. Did your selected corporation have any preferred stock at end of the year? If yes, what is the amount?
D. Examine the notes at the bottom of the balance sheet. Is your selected corporation authorized to issue preferred stock? If so, how much?
E. How much of your selected corporation's common stock was outstanding at end of year? How can you tell?