What is a common stock? What is meant by the statement that holders of common stock are the residual owners of the firm?
Answer to relevant QuestionsBriefly explain how the dividend decision is made. What corporate and market factors are important in deciding whether, and in what amount, to pay dividends? Why do most income stocks offer only limited capital gains potential? Does this mean the outlook for continued profitability is also limited? Explain. What is a stock split? How does a stock split affect the market value of a share of stock? Do you think it would make any difference (in price behavior) if the company also changed the dividend rate on the stock? Explain. Briefly define each of the following types of investment programs and note the kinds of stock (blue chips, speculative stocks, etc.) that would best fit with each. a. A buy-and-hold strategy b. A current-income portfolio c. ...Ron’s Rodents Co. has total assets of $5 million, total short- and long-term debt of $2.8 million, and $400,000 worth of 8% preferred stock outstanding. What is the firm’s total book value? What would its book value per ...
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