Required:
1. What is the difference between preferred stock and common stock?
2. What is treasury stock?
3. Why does the SEC require companies to exclude redeemable preferred stock from shareholders’ equity even when redemption is not mandatory?
4. Describe how the cost of stock-based compensation is determined?
5. Once the cost of stock-based compensation is determined, describe how the amount to be expensed in a given period is determined?
6. Explain the difference between basic and diluted earnings per share.