Why is it important to keep paid-in capital separate from earned capital?

Prepare a clear and concise paper that addresses the following questions/concepts.  There is not a specific word count, but as a guide approximately 500 to 1,000 words.  The Equity Paper should demonstrate your knowledge of the subject vs. quoting materials from various sources.  We will be discussing these topics in class.  I want to hear from each of you, thus avoid excessive citing of material from outside sources; explain the concepts in your own words.  You do not need an introduction and make sure to label each section of the paper in accordance to the questions below.

  • Why is it important to keep paid-in capital separate from earned capital?
  • As an investor, is paid-in capital or earned capital more important? Explain why.
  • As an investor, are basic or diluted earnings per share more important? Explain why.

Format your paper consistent with APA guidelines.

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