Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: Answer the following questions for the Mulatto brothers. How are paid-in-capital and retained earnings: Similar? Different? 2. What are the main categories of paid-in capital? 3. When does a company declare a cash dividend? 4. Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? 5. What does the term par value of stock mean?
Scenario:
Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a
Requirements:
- Answer the following questions for the Mulatto brothers.
- How are paid-in-capital and retained earnings:
- Similar?
- Different?
2. What are the main categories of paid-in capital?
3. When does a company declare a cash dividend?
4. Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation?
5. What does the term par value of stock mean?
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