M5-Assignment 2: Common and Preferred Stock

Assignment 2: Common and Preferred Stock

Respond to the following independent issues concerning the capital stock of corporations in your initial post:

• Why are paid-in-capital and retained earnings displayed separately in the stockholder’s equity section of the balance sheet?
• Why would investors buy common stock when preferred stock is available?
• If you owned 5,000 shares of common stock in Microsoft Corporation and someone offered to buy the stock for its book value, would you accept the offer? Provide rationale for your decision.

By Sunday, August 16, 2015, post your response and respond to at least two other students’ initial posts by the end of the week.