Final Answer:
Stockholders invested $38,000 in the business in exchange for common stock of the company.
Step-by-step explanation:
The infusion of $38,000 into the business through investment in common stock represents a significant capital injection. This transaction signifies the acquisition of ownership in the company by the stockholders in return for their financial contribution.
Common stock is a form of equity that grants shareholders voting rights and potential dividends, thereby aligning their interests with the company's growth and success. This investment boosts the company's financial foundation, enabling it to fund operations, expand, invest in new projects, or pay off debts.
The influx of $38,000 in exchange for common stock serves as a pivotal source of capital for the company's growth trajectory. It showcases the confidence of investors in the business's prospects and goals.
However, issuing common stock can dilute existing shareholders' ownership if additional shares are offered, potentially impacting their control and earnings per share. Nevertheless, it remains an effective method for companies to raise funds without incurring debt or interest payments, fostering expansion and innovation.