Common Stockholders
1. What are the three legal forms of business?
2. How does the number of owners differ among the three forms?
3. What is the process for incorporating a business?
4. What liability do stockholders have for a corporation’s debts?
5. Explain the “double taxation” concept as it applies to corporations.
6. Define “common stock.”
7. List three rights normally held by common stockholders.
8. Define “authorized” number of shares of common stock.
9. Define “issued” number of shares of common stock.
10. Define “outstanding” shares of common stock.
11. Explain the meaning of “par value” of a share of stock.
12. Why is preferred stock called “preferred”?
13. What is treasury stock?
14. Give three reasons a corporation might want to buy back its own stock.
15. What is a dividend?
16. What is a cumulative dividend?
17. What is a stock dividend?
18. What is the difference in accounting between a small stock dividend and a large stock dividend?
19. Why do corporations issue stock dividends?
20. How is return on equity calculated?
21. How is a company’s price-earnings ratio calculated?
22. How is basic earnings per share determined?
23. Why would a company be required to report diluted earnings per share?