Business Finance Homework Help

What are the advantages and disadvantages of the following financial securities to both the corporation and the investor?

Common stock

Preferred stock

Include your own experience as well as 2 citations that align with or contradict your comments as sourced from peer-reviewed academic journals, industry publications, books, or other sources. Cite your sources using APA formatting.

• PART 2

REPLY IN 175 Words

• Preferred stocks, like common stocks, will pay a dividend to the investor. The difference, however, is that preferred stocks will pay that dividend at agreed-upon rates and intervals. The common stock dividend is based on the profitability of the company.

Why does the profitability of a company impact the dividend that is paid? Is this a good approach to luring investors? Please share your thoughts.

PART 3 

REPLY IN 175 Words

Capital budgeting projects encompass a wide variety of different investments including growth policies, merger’s acquisition, etc. when no such cost can be added then capital budgeting and additional cash surplus occurs and it is not required, but the organization is expected to pay out some or all of the excess earnings as cash dividends.

Through what other methods can the surplus cash be distributed?