A few days ago, Deanna Watson purchased 100 shares of Microsoft common stock for$35per share. Deanna is
Question:
a. Deanna holds the stock for five months and then sells it for $40 per share.
b. Deanna sells the stock for $45 per share 13 months after she purchased it.
c. Deanna doesn’t sell the stock until four years from today, when the selling price is $105 per share. Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
a If Deanna holds the stock for only five months the gain is a shortterm ca...View the full answer
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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