Martha, Vera, and Sandra opened a catering business, Three Sisters Catering, Inc. as a small corporation. Initially all three sisters bought 1,000 common shares for $10,000.00. The corporation has recently suffered some financial losses and needs an infusion of cash (approximately $20,000.00) to stabilize. The sisters agreed to offer an additional 2,000 shares to generate the additional $20,000.00; a friend of the three sisters has agreed to buy the shares but does not plan to be actively involved in the business. 

Should the shares be common shares or preferred shares?

Answer rating: 100% (QA)

In this scenario the decision between issuing common shares or preferred shares depends on the prefe... View the full answer