T4-2

Question 1

public corporation

Answer 1

i. stock for public sales/thousands of stockholders

Question 2

private corporation

Answer 2

i. no stock for public and few stockholders

Question 3

rights of stockholders

Answer 3

i. Vote
ii. sell/dispose of their stock
iii. purchase their proportional share of any common stock later issued by the corporation
iv. receive the same dividened of each common share
v. share in any assets remaining after creditors/preferred stockholders are paid, each common share received the same amount

Question 4

IPO

Answer 4

a. Initial public offering

b. First time a corporation sells stock to the public

Question 5

secondary market

Answer 5

a. market where investors buy and sell stocks and bonds among themselves
b. creates an incentive for investors to commit capital to investment in the first place
c. transactions between two investors that do NOT affect the corporation’s accounting records