Chapter 13, Problem P13.46BPGB

To determine

The Corporate form of Business:

There are several forms of business organizations like proprietorship, partnership, limited liability partnership, Corporate etc. Corporate for is the most complicated and wider form of business organization. It creates a separate legal identity of the business and allow the business to raise funds through public issue.

Common Stock v/s Preferred Stock:

These are two types of the share capital of a company. Common Stock represents the Common shares issued to the shareholders and preferred stock represents the preference shares issued. Preference shares are given preference in payment of dividends and repayment of capital. Common shareholders get the inbuilt right to vote in decisions of the company and preference shareholders generally do not get this right but they may get voting rights with special provisions.

1. Advantages of the Corporate form of business:

To indicate:

The advantages of the Corporate form of business

To determine

2. Initial issue by the company:

To indicate:

The type of initial share capital

To determine

3. The Number of shares to be issued:

To determine:

The number of shares to be issued to raise the desired capital