Stockholders' Equity: Classes of Capital Stock

Read this chapter, which details stockholders' equity, specifically capital stock. You learn about the different classes of stock, their characteristics, how capital appears on the Statement of Stockholders' Equity, and the steps for issuing stock to the public.

Learning objectives

After studying this chapter, you should be able to:

  • State the advantages and disadvantages of the corporate form of business.
  • List the values commonly associated with capital stock and give their definitions.
  • List the various kinds of stock and describe the differences between them.
  • Present in proper form the stockholders' equity section of a balance sheet.
  • Account for the issuances of stock for cash and other assets.
  • Determine book values of both preferred and common stock.
  • Analyze and use the financial results – return on average common stockholders' equity.

Source: Textbook Equity,
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