What are at least two of the advantages of using common stock as a source of fun
ID: 2759819 • Letter: W
Question
What are at least two of the advantages of using common stock as a source of funds when compared to debt?
When is the constant growth model appropriate to use when valuing a firms stock?
Discuss at least two instances that would cause a company's stock to be in a period of non-constant growth.
Why is a firm's book value per share seldom equal to its market value per share?
Discuss the national stock exchange in your country. How many different stocks are listed? What is the volume of shares traded on a specific day (convert values to US dollars? Provide any other information which is relevant.
Explanation / Answer
What are at least two of the advantages of using common stock as a source of funds when compared to debt?
When is the constant growth model appropriate to use when valuing a firms stock?
Discuss at least two instances that would cause a company's stock to be in a period of non-constant growth.
Why is a firm's book value per share seldom equal to its market value per share?
Discuss the national stock exchange in your country. How many different stocks are listed? What is the volume of shares traded on a specific day (convert values to US dollars? Provide any other information which is relevant.
1.
Advantages of using common stock are:
a. No-maturity
b. Increases firm’s borrowing power
c. No fixed payment obligation
2.
When the firm whose stock is being is in 'steady state' with dividends growing at a rate that can be sustained forever.
4.
Book value is based on the value of total assets less the value of total liabilities- it attempts to measure the net assets a company has built up until the present time. Market value is a measure of value based on the future earnings a company is expected to generate for its investors - it attempts to measure the total net assets a company is expected to build in the future.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.