Chapter 7 Stocks and Stock Valuation
Learning Objectives
LO1 Explain the basic characteristics of common stock.
LO2 Define the primary market and the secondary market.
LO3 Calculate the value of a stock given a history of dividend payments.
LO4 Explain the shortcomings of the dividend pricing models.
LO5 Calculate the price of preferred stock.
LO6 Understand the concept of efficient markets.
In Chapter 6, we showed how companies raise money by issuing bonds. We now consider another major source of funding for the corporation: issuing stocks. Stocks are different from bonds in several ways. Perhaps most notable is that they represent ownership ...
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