Explain about the equity claims in the financial security, Financial Management

Assignment Help:

Explain about the equity claims in the financial security.

Equity classifies claims to shares into the net income and assets of a firm, and they do not contain a maturity date. But into terms of economic rights, equity claims be different from debt instruments for several purposes.

a. First, firms are not contractually obliged to create periodic payments to equity holders: there payment of dividends is a discretionary conclusion of the firm.

b. Second, firms should pay all their debt holders before they create any payment to equity holders: thus equity holders are residual claimants.


Related Discussions:- Explain about the equity claims in the financial security

Financial plan , As starting a new business, is it better to leas or buy th...

As starting a new business, is it better to leas or buy the business venture?. what factors should be considered. (Knowing that the equity finance is $150,000 and $250,000 could be

Determine the term- time value of money, Determine the term- Time Value of ...

Determine the term- Time Value of Money If an individual behaves rationally, then he wouldn't equate money in hand today with same value a year from now. As a matter of fact, h

Financial management, Financial Management: Financial management is, in...

Financial Management: Financial management is, in its most basic interpretation, the management of costs against revenue. Other management initiatives, such as marketing, are d

return on equity, Lee Sun's has sales of $6,000, total assets of $5,000, a...

Lee Sun's has sales of $6,000, total assets of $5,000, and a profit margin of 10 percent. The firm has a total debt ratio of 40 percent. What is the return on equity?

Cash dividends factors that decided by stockholders, What are some of the f...

What are some of the factors that common stockholders consider when deciding how much, if any, cash dividends they desire from the corporation in which they have invested? Gene

Finance manangement, What is the maximum price that you would be willing to...

What is the maximum price that you would be willing to pay for a constant growth stock that has the following characteristics: (a) Dividend (Has Paid): $3.25, (b) Growth: 7%, and (

Show the projected balance sheet method, Q. Show the Projected Balance Shee...

Q. Show the Projected Balance Sheet Method? Projected Balance Sheet Method: - Under this process an approximate is made of assets and liabilities for a future date and a projec

Coefficient of determination, Coefficient of Determination As before, ...

Coefficient of Determination As before, Where, We can show that TSS = RSS + ESS We can also show that F = is an F distr

Yield volatility and measurement, Measuring volatility is very impo...

Measuring volatility is very important as it is a critical input in valuation models. In subsequent chapters we will see the importance of assumed volatilit

Uses of index numbers, Uses of Index Numbers 1. Establishes trends ...

Uses of Index Numbers 1. Establishes trends Index numbers when analyzed reveal a general trend of the phenomenon under study. The available figures for inflation based

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