Part 1 (paragraph length)
The CEO of your company has asked you to make a speech at the next board of directors meeting to the directors on stocks and dividends.
Explain the following:
- What are the differences between a stock dividend, a stock-split, and treasury stock?
- For each event:
- explain the effects to stockholders
- explain the effects on the financial statements of the corporation
- Discuss why it is important to know what the company's net income and not just rely on the stock price.
Part 2 (1-2 pages)
The owner of the company where you work finds out that you are majoring in accounting and she wants you to explain the corporate structure to her. She also wants to see why someone would want to invest in a corporation. She wants to better understand stock transactions that the corporation would engage in.
She wants you to:
- Explain the corporate structure.
- Select two companies in the same industry and find their financial statements for the last two years. Provide citations for all statements.
- Compare the stockholder's equity between these two company's financial statements.
- Explain what kinds of stock transactions have taken place in the last two years.