Course

ACCT 212 Financial Accounting

Week 7 Discussion: Stockholder’s Equity

Let us take a glimpse at the inner workings of stockholder’s equity. Most corporations first raise money by selling stock to the founders of the business and to their friends and family. As the equity financing needs of the corporation grow, companies prepare a business plan and seek outside investment. Most organizations that end up selling stock on a major stock exchange do not begin that way. There is usually a progression of equity financing stages leading to a public offering. Privately held corporations do not permit investment by the public, and typically has fewer stockholders than a public corporation.

SOLUTION  

Facebook was a privately held company before becoming public. Stockholders, whether they are public or private, are the legal owners of the corporation and are entitled to certain rights, including the ability to vote and choose the board of directors, the ability to receive dividends, and the ability to participate in the distribution of assets in the event that the business is dissolved. a $16 billion outside investment fund was raised in May 2012.……please click he icon below to purchase the solution at $5