FI 491 Lecture Notes - Lecture 31: Stock Valuation, Preferred Stock, Common Stock
Document Summary
Common stock values the worth of a share of a common stock can be described in a number of ways: par value, book value, market value, investment value are all found in the financial media. Par value refers to the stated, or face, value of a stock; relatively useless except for accounting purposes; no use to investors. Bv = (firms assets) - (firms liabilities + preferred stock) Market value one of the easiest stock values to determine; it is the prevailing market price of an issue; indicates who the market participants as a whole have assessed the worth of a share of stock; Mv (share)= current mkt price of last stock trade. Mv x #outstanding shares = firms market value or market capitalization; this changes moment to moment/ daily. Market capitalization: us stock market segments by size: Mid cap stocks: bill to 10 bill. Corporate vs market factors weighed to consider the question of paying dividends.
