MGFB10H3 Chapter 7: Chapter 7 Notes

102 views2 pages
1 Jun 2011
School
Department
Course
Professor

Document Summary

7. 2 preferred share valuation because payments are essentially fixed when preferred shares are issued, such shares are referred to as fixed income investments. 7. 3 common share valuation: the dividend discount model (ddm) Constant growth ddm a version of the dividend discount model for valuing common shares, which assumes that dividends grow at a constant rate indefinitely. Identify the basic characteristics of equity securities (i. e. , preferred shares and common shares) and describe the general framework for valuing equity securities. Equity securities are ownership interests in a company. Common shares have voting rights and pay a dividend (at the discretion of the board of directors). Preferred shares have no voting rights and pay a fixed, regular dividend. In the event of bankruptcy or liquidation, preferred shareholders are entitled to their par value before common shareholders are paid (if there is enough money to pay the par value after creditors are paid).

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions