Chapter 8, Problem 8.3.1C

To determine

Concept introduction:

Common Stock:

The stock, also known as shares, which gives equity ownership and rights in the company in regard to voting for policies and to share profits of the company is termed as common stock.

Debt:

It is a liability of the company which it has to pay after a certain time along with a fixed rate of interest. This is used by the company for the expansion of the businesses.

To discuss:

The arguments on whether to classify the stock issuance as debt or not.