Capital stock is a major part of a corporation’s equity. The term capital stock embraces both common and preferred stock.
a. Identify the basic rights inherent in ownership of common stock and explain how owners exercise them.
b. Describe preferred stock. Discuss various preferences often afforded preferred stock.
c. In the analysis and interpretation of equity securities of a corporation, it is important to understand certain terminology. Define and describe the following equity items:
(1) Treasury stock
(2) Stock right
(3) Stock warrant