3 Essay Questions (Common and Preferred Stock, Paid-in and Earned Capital, Basic EPS, Diluted EPS)

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1. Explain the differences between Common and Preferred Stock.

2. Define paid-in capital and earned capital. Explain the importance of keeping Paid-in Capital separate from Earned Capital.

3. Define Basic Earnings per Share vs. Diluted Earnings per Share? As an investor, are basic or diluted earnings per share more important? Explain why.


Note: Answer each question completely by supporting conclusions. It has to be at least 750 words
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