In your reading this week, you’re learning about the corporate form of organization, the issuance of common stock, and the accounting for treasury stock. In this discussion, you’ll explore how raising capital with common stock differs from raising capital through a debt issuance such as bonds payable. You’ll also explore the reasons why companies will purchase treasury stock.
Please respond to all of the following prompts:
1.Compare and contrast the advantages and disadvantages of issuing common stock versus issuing long-term debt.
2.Provide two possible reasons why a company might decide to purchase treasury stock. •Explain how the purchase of treasury stock affects earnings per share and the value of the remaining outstanding common shares.