1. What is the meaning of each of the following terms: corporation, articles of incorporation, corporate

charter, board of directors, corporate officers, and organization costs?

2. What is meant by the limited liability of a stockholder? Does this characteristic enhance or reduce a corpo-

rations ability to raise capital?

3. Contrast the federal income taxation of a corporation with that of a sole proprietorship and a partnership.

Which of the three types of organizations must file a federal income tax return?

4. Define par value stock. What is the significance of a stocks par value?

5. What is the preemptive right of a stockholder?

6. What are the basic differences between preferred stock and common stock? What are the typical features

of preferred stock?

7. What features make preferred stock similar to debt? What features make it similar to common stock?