Question

In your own word,

1. What is paid-in capital?

2. What is a dividend?

3. How does Treasury Stock differ from Preferred Stock?

Answer 1

1. Paid in capital : Paid in capital is the amount of cash paid by the investors on the issuance of the common or prefferred stocks.Paid in capital refers to the funds raised by the company by issuing the common or preferred shares.

2. Dividend :Dividend is the sum of money paid to its shareholders out of its profits. Dividends can be either cash dividend or stock dividend. Cash dividend is paid in cash and stock dividend is paid in shares.

3. Treasury stock may be stock which is bought back or the shares company is unable to sell in total.Unlike to the preferred stock treasury stock is not paid any dividends and not given any voting rights.

Thanks....