chapter 7 vauation and characteristics of stockchapter 7 val.pptVIP

Chapter 7 Valuation and Characteristics of Stock 股份公司的制度安排 Aim 1.?????Identify the basic characteristics and features of ferret stock. 2.?????Value preferred stock 3.???? Identify the characteristics and features of common stock 4.??????Value common stock 5 Calculate a stock’s expected rate of return Terms Preferred Stock Common Stock The Stock Holder’s Expected Rate of Return Call provision Convertible Preferred Stock Cumulative Feature Cumulative Voting Expected Rate of Return Internal Growth Limited Liability Majority Voting Multiple-holding Period Preemptive Right Protective Provisions Proxy Proxy Fight Sink-fund Provision Valuation Model Preferred stock Hybrid security No fixed maturity date. Nonpayment of dividends leads no bankruptcy. Taxable Limited in amount. Multiple classes More than one series or class Each different characteristics. 13 Priority status regarding assets in bankruptcy. No residual earning Par: $25 Dividend rate: 7.56% Dividend $1.89 Cumulative feature Past unpaid be paid before common stock dividends declared. No dividend enforcement. Claims on assets and incomes Priority over common stock. Bonds preferred stock Preferred stock safer common stock Common stock. Protective provisions Restrict the payment of common stock. Voting right in case of nonpayment. (six quarterly dividends in arreas. Sinking funds Convertibility At discretion(处置权）：predetermined shares. 1/3 convertibility feature. Reduced the cost of common stock. Retirement feature Take advantage of falling interest rates. Call provision: repurchase at stated price. Initial premium above the par 10%. Sinking fund provision: set a maturity date. OBJECTIVE 1 Preferred stock Multiple classes of preferred stock ·Preferred stock’s claim on assets and incomes ·Cumulative dividends ·Protective provisions ·Convertibility Multiple classes Claim on assets and incomes l???????? Cumulative feature l???????? Protective provisions l???????? Convertibi