Question

Incorporation and organization involve various legal and financial considerations. One important aspect is the capitalization of the corporation, which refers to the amount and types of capital invested by stockholders or shareholders. In this scenario, let's explore a practical situation related to capitalization.

Scenario:

ABC Corporation is a newly formed company planning to raise capital through the issuance of shares of stock. The board of directors has decided to offer both common and preferred shares to potential investors. The articles of incorporation state that the authorized capital stock is 10,000,000 shares, divided into 8,000,000 common shares and 2,000,000 preferred shares. The common shares have a par value of ₱10 per share, while the preferred shares have a par value of ₱100 per share.

Based on the scenario above, answer the following questions:

1. What is the total capital stock authorized by ABC Corporation?
2. How many common shares are authorized by ABC Corporation?
3. How many preferred shares are authorized by ABC Corporation?
4. What is the par value of each common share issued by ABC Corporation?
5. What is the par value of each preferred share issued by ABC Corporation?