Suppose that you are Dear FASB, the question-and-answer person for a magazine called Rure Business. Rural Business is a magazine devoted to serving the needs of small and medium sized businesses in rural communities. Readers of your magazine are invited to submit letters to Dear FASB, who offers advice in "Dear Abby" style in a special section of the magazine. Your editor's policy is to require revision whenever she believes a nonaccountant would have difficulty understanding a response. One day you receive the following letter: Dear FASB, Dear FASB: Last year I placed my landscaping business up for sale. So far I've received one offer, a regional manufacturing firm wishes to diversify and is intrigued by the opportunity to open new markets for its products. However, I'm concerned with the offer and would like an outsider's perspective. The manufacturer is offering me 10,000 shares of 12% preferred stock (par value of $100 ). The manufacturer's negotiator stated that this stock is better than regular common stock as it has a stated dividend rate. However, he did indicate that I wouldn't have voting privileges because of minimum dividend rate attached to the stock. The $120,000 minimum annual dividend would be about what I'm making from the business now. Furthermore, he indicated the payoff could be greater because this stock would carry a participating feature if the common shareholders approve the deal. I've reviewed the company's financial statements and it reports stockholders' equity of $34.2 million. However, the shareholders have contributed $40 million and there is a retained earnings deficit of $4 million and $1.8 million of treasury stock. No preferred stock has been sold in the past because the company only recently received approval to issue the shares that are being offered to me. I'm concerned about the about two items: 1) the untested market for the preferred stock, and 2) effectiveness of the manufacturer's management given the retained earnings deficit. I don't want to sell my business (appraised market value of $1,140,000) and find out the stock has a lower market value. Also, it seems that they've created this preferred stock just for me - am I being taken advantage of? Sincerely, Wary of Special Stock Required: Your task is to write an answer to Wary of Special Stock. Because space in your magazine is limited, restrict your answer to 230 words in the body of the response. The document must have reasonable margins and font setting