ACCTMIS 2200
Equity Financing
● Two categories of Equity:
○ Contributed Capital – this is the amount that owners have contributed through the
purchase of stock.
■ Capital Stock
● Preferred Stock
○ Has dividend preference – means if a dividend is paid the
preferred stockholders must be paid in full before common
stockholders can receive a dividend.
○ The preferred stock dividend is set at a fixed percentage
○ Preferred stockholders typically do not have voting rights.
● Common Stock
○ Common stockholders have voting privileges.
■ Election of board of directors
■ Vote o significant activities of management
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