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FINANCIAL ECONOMICS WEEK 4: VALUATION OF STOCK

I. ABCS ABOUT STOCK A. COMMON STOCK: IMPORTANT FEATURES  Represents ownership.  Also known as equity or shares. A natural consequence of corporations.  Shares are residual claims.  Creditors and preferred shareholders (which will be introduced soon) must be paid as scheduled before common stockholders can receive any payments.  Has limited liability.  Common shareholders may lose their initial investment but not more.  Common stock typically has voting rights.  One share one vote.  Internet technology has made voting easier for individual stockholders.  The majority rule usually applies. But some decisions require the approval from more than one half of the stockholders. ... [Show More]

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