Question

Select all that apply

A statement of stockholders' equity lists balances of:
O common stock shares
O accrued dividends
O cash dividends
O retained earnings
O earnings per share
O net income

Answer 1

A share of stock represents ownership in a company. When a company sells stock to the public through an initial public offering (IPO), they receive financial capital. Dividends are direct payments from a firm to its shareholders, while capital gain is the increase in stock value.

Step-by-step explanation:

A share of stock represents ownership in a company. When a company sells stock to the public through an initial public offering (IPO), they receive financial capital.

However, when one shareholder sells stock to another investor, the firm does not receive funds.

A dividend is a direct payment from a firm to its shareholders. It is a portion of the company's profits that is distributed to the shareholders. On the other hand, a capital gain is the increase in the value of a stock since its purchase. It is realized when the stock is sold at a higher price than its purchase price.