BUL-3310 Lecture Notes - Lecture 31: Stock Certificate, Treasury Stock, Preferred Stock
28 Nov 2017
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A shareholder is an owner of the corporation; a bondholder has no voice in the operation of the corporation: common vs. Preferred stock: common stock has no priority, preference, or advantage over other classes of stock. Preferred stock has priority over common stock in payment of dividends and distribution of assets of the corporation upon dissolution: preferred stock is cumulative if dividends from previous years are paid when earnings are a(cid:448)aila(cid:271)le. If the preferred shareholder is to receive only the preference, the shares are nonparticipating. Purchaser should investigate the corporation and its assets: watered stock is stock for which the full par value has not been paid. The shareholder is liable for the unpaid amount; this applies to par value and no-par value stock: treasury stock: this is stock previously sold for value which is reacquired by gift or through a purchase.
