Jim Collins, your uncle, is an inventor who has decided to incorporate. Uncle Jim knows that you are an accounting major at U.N.O. In a recent letter to you, he ends with the question,

“I’m filling out a state incorporation application. Can you tell me the difference among the following terms: (1) authorized stock, (2) issued stock, (3) outstanding stock, and (4) preferred stock?”

Instructions In a brief note, differentiate for Uncle Jim the four different stock terms. Write the letter to be friendly, yet professional.

ETHICS CASES