MEMORANDUM
Dear Sir, This memo is written to address the problems faced by the Big Corp. as a result of the bankruptcy of its subsidiary Sub Corp. the memo discuss the different statutory and regulatory matters applicable in this matter. It also recommends the solution on whether the dividends paid by the company should be treated as a return on capital or ordinary dividends. At first, it is important to understand the basic difference between preferred and ordinary stocks. Preferred shareholders have a preferred claim to the earnings and profits of the company. When the company has excessive cash and ...
