Name two patterns of cash flows for a share of common stock, Financial Management

Assignment Help:

Name two patterns of cash flows for a share of common stock. How does the market define the value of the most common cash flow pattern for common stock?

Cash flows for a share of common stock contain dividend payments and the price received for the eventual sale of the share.  Common stock valuation is complex by the fact that common stock dividends are hard to predict compared to the interest and principal payments on a bond, or dividends on preferred stock. Certainly, corporations may pay common stock dividends not regularly, or not pay dividends at all.

Since with bonds and preferred stock, the market values common stock by estimating the current value of the expected future cash flows from the common stock.


Related Discussions:- Name two patterns of cash flows for a share of common stock

Add or Drop Analysis, Lakespring Retirement Village is home to senior citiz...

Lakespring Retirement Village is home to senior citizens who are fairly independent but need assistance with basic health care and occasional meals. Jill Thompson, a licensed beaut

Define the process of wealth maximisation, Define the process of Wealth Max...

Define the process of Wealth Maximisation Shareholders' wealth can be defined as total market value of all the equity shares of company. So when we talk about maximising wealth

CVP analysis, What is the meaning of Breakeven point?

What is the meaning of Breakeven point?

Future value, Future V alue The value of an investment is based...

Future V alue The value of an investment is based on the rate of interest paid at set time periods and at some point in the future. Future values incorporate both the i

Importance of financial management, Importance of Financial Management: ...

Importance of Financial Management: Proper finance is the real key to the success of any business enterprise. Without proper finance no business can survive nor can it be expa

Return on common equity finance basics, At the end of the fiscal year endin...

At the end of the fiscal year ending June 30, 2003, Microsoft reported common equity of $64.9 billion on its balance sheet, with $49.0 billion invested in financial assets (in the

Analysing performance through ratios, Analysing performance through ratios ...

Analysing performance through ratios Ratios are an effective way of analysing financial statements. A ratio is 2 figures compared to each other and can either be in absolute te

Incorporation of the risk in investment proposal, Q. Incorporation of the R...

Q. Incorporation of the Risk in Investment Proposal? Incorporation of the Risk in Investment Proposal: - As stated previous risk is involved in every capital budgeting decision

Eps, a. Calculate expected earnings per share (EPS) if the firm is perfectl...

a. Calculate expected earnings per share (EPS) if the firm is perfectly hedged. EPS $

Calculation of a firms sales returns, a) The combined two-firm concentratio...

a) The combined two-firm concentration ratio of Motorola (approximately 17.5%) and Nokia (35%) is around 52.5% of the market. b) Up to 2 marks for correct definition: Market sha

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd