responses to the following prompts?

 

• What are a few differences between common stock and preferred stock? (1-2 paragraphs)
• What makes up the potential total return of a common stock you purchase? (1-2 paragraphs)
• Why are stocks generally more difficult to value than bonds? (1-2 paragraphs)
• Why might a company choose not to pay dividends? (1-2 paragraphs)
• Under what two assumptions can you use the dividend growth model to determine the value of a share of stock? (2-3 paragraphs)
• Based on the dividend growth model, what are the two components of the total return on a share of common stock? Which do you think is typically larger? (1-2 paragraphs)

Just so you know, for each prompt, reference at least one scholarly source to support your answer.

Answer rating: 100% (QA)

1 Differences between Common Stock and Preferred Stock Common stock and preferred stock are two types of ownership securities with distinct characteristics Common stock represents ownership in a compa... View the full answer