Finance discussion
Section 1
By being the Chief Finance Officer, there is a need to ensure that the business is able to raise capital and issue a particular level of equity. The company then requires an approach that will be welcoming to investors who will help the business achieve its intended goals and meet also meet the desires of the investors who find value in the shares of the company that they purchase. The purchasing of these shares can be done through both common stock and preferred stock.
Although the two, common stock and proffered stock, work in more similar ways, they are still different. Bratton and Wachter (2013) detail that common stock allows the investor also to have some partial ownership to the company, which then gives the investors the right to choose representatives in the company. For preferred stock, on the other hand, it is more similar to a bond since the shares allow the investor to receive a certain amount in every dollar that the company makes. The allowance of these two stocks will allow businesses to welcome investors and have an impact on the business through its processes by engaging the investor in the processes of voting of any representative, which will also give them confidence in the processes of the business. Another reason that the use of both stocks include that some of the investors will prefer common stocks which will allow them to engage in other practices and other businesses while still gaining returns from the current stocks that they have on the business. It then increases the chance to accommodate as many investors for the company as possible once they adopt the use of both stocks.
References
Bratton, W., & Wachter, M. (2013). A Theory of Preferred Stock. SSRN Electronic Journal. doi: 10.2139/ssrn.2214015