Team Week 3 Weekly Reflections

Team A Week 3 Reflections

In week three team A has gained the knowledge and understanding of the different stocks with learning the differences between common and preferred stocks. Along with learning the different types of stocks we have also learned who issues the stocks for corporations. We know now why preferred stocks are called preferred and the advantages and disadvantages of the two different stocks. We have also learned how to calculate stocks, dividends and stock distribution. We have also learned about corporations and how a business becomes a corporation.

Stock is a buy into ownership of a business. It buys into a business assets and earnings. Calculating into stock participants must understand how the earning is calculated per share. Calculating the earning per share is calculated by the net earning and divides by payable per share (Kimmel, Weygandt, & Kieso, 2010).

A dividend is cash distribute, which a company pays to shareholders from earning. Profitable businesses pay dividends. Calculating the dividend amount is taking the number of owned share and multiplying it by the dividend of per shares (Kimmel et al., 2010).

Stock distribution is increase of the number of payable share, which is divided for each shareholder. The shareholders receives extra share, but the value is reduce by half. For example, if two shares are equal as the original value; the value is split. The calculation of stock distribution can be complicated (Kimmel et al., 2010).

The two different types of stock include preferred and common stocks. Preferred stocks are called preferred because of they have priority over common stocks. Preferred stocks have features that are added to them to make them more attractive to the buyers. These features include cumulative, participative, and convertible. Both of these stocks are beneficial and an possible opportunity for a business. Common stock is the basic type of stock a business can obtain from a corporation. Basic types of stock can be purchased with limitation and has limited value. Owning common stock of a corporation means a fraction of the company is own and the value impact the company's monetary success and failure. Most businesses see common stock as a risky investment but will receive a profit after the preferred stock is disbursed. Preferred stock is the other type of stock that corporations issue. Owning a preferred stock consists of dividends received before common shareholders. The differences in common shareholders benefits preferred stock depends on a fixed dividend fees. Example being if a company is going out of business or liquidates the business assets; preferred stock will receive money, which was invested and is disbursed before the common stock.

The team has also learned the steps for a business to become a corporation. With starting off with filing an application with the Secretary of State in the state in which they