equity valuation

Question 1

what is ordinarty share?

Answer 1

share of ownership in the company give the owner rights to ordinary dividends.

Question 2

what is annual meeting

Answer 2

event where managers and directors answer questions from share holders and they vote on the election of directors

Question 3

what is a proxy?

Answer 3

is an act through which shareholders direct their shares be voted for them

Question 4

what is an ordinary share/common equity

Answer 4

• confer propotional ownership rights
• right to vote at annual meetings
• residual chasflow rights to whatever is left after the bills
• limited liability

Question 5

preference shares

Answer 5

cumulitive preference shares

non cumulative preference

Question 6

what is cumulative preference shares

Answer 6

unpaid dividens are carried forward, must be paid before ordinary dividends

Question 7

what is non cumulative preference shares?

Answer 7

missed dividens do not accumulate. can pay current dividend payments first to preference and then to ordinary shares

Question 8

financial intermediaries 2 types

Answer 8

dealers
- ready to buy or sell any time
-act as principas
-no fiduciary
brokers
-facilitate client acces to market
-have fiduciary duty
think real estate broker

Question 9

aset pricing

Answer 9

price today=d1+p1/1+rate