CDAE 158 Lecture Notes - Lecture 17: Value Line, Uptodate, Stock Split

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To finance start-up costs and help pay for expansion and their ongoing business activities. They dont have to repay the money a stockholder pays for stock and the company does not have to buy back shared from stockholders. The stockholder may sell a share of stock to another investor. Dividends are paid out of profits, and dividend payments must be approved by the board of directors. Most corporations distribute 30-70% of their earnings to stockholders. In return for investing in the company, stockholders have voting rights. Common stockholders elect board of directors and must approve major policy changes. Investors want the larger returns that stocks offer, even though they are aware of the potential for losses. Income from dividends in the form of cash, additional stock, or company products. Happens when the shares owned by existing stockholders are divided into a. Investors in preferred stocks receive cash dividends before common stocholders are paid.

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