Problem
Fact Scenario: Tech Strategy, Inc. is an Ohio corporation whose articles authorize 200,000 shares of common stock with a par value of $1.00 per share. The corporation has issued 190,000 shares. The articles also authorize 25,000 shares of preferred stock, all of which have been issued. The preferred stock has cumulative dividends and conversion rights.
a) The corporation would like to raise some needed capital. What options are available to the corporation?
b) Paul, a preferred stockholder, has not received a dividend in 2 years. This year the corporation has sufficient profits to permit distribution of dividends. Describe Paul's rights and the rights of Sam, a common stockholder, with regard to these dividends.