FIN-3403 Lecture Notes - Lecture 8: Proxy Voting, Cumulative Voting, Ordinary Income
Document Summary
Financial management of the firm - chapter 8 notes. Primary right - elect corporate directors who set corporate policy and select operating management. Vote on matters of importance annually and one-time (e. g. auditors, mergers) Preemptive right the right to purchase a pro rata share of any new stock issue. Payment of dividends is at the discretion of the board. Dividends are not tax deductible for the paying rm. Dividends received by individuals are taxed based on the holding period of the stock (ordinary income vs. capital gains) Precedence over common stock in the payment of dividends and in liquidation. Dividend is usually xed (stated as percent of par value - standard par = ) Book value = common stock + additional paid-in capital + retained earnings. Market value = price per share in market trade. Stock valuation using cash flows / dividend valuation models. Value of a share = current share price (observable)
