Management and Organizational Studies 2310A/B Chapter Notes - Chapter 8: Cumulative Voting, Double Taxation, Preferred Stock

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2310A/B
• Professor: Danny Morrison

Document Summary

P0 = (d1 + p1) / (1 + r) P0 = current price of the stock (pv) P0 = d1/(1+r)1 + d2/(1+r)2 + d3/(1+r)3: when the dividend has a zero growth rate. P0 = d/r: when the dividend has constant growth g is the constant growth rate. P0 = [d0 x (1 + g)] / (r - g) = d1 / (r - g: when the dividend has non constant growth, but zero in the first year. P4 = d5 / (r - g) -> a future year. Industry life cycle: business cycle, supply and demand shocks, liquidation value of the firm, replacement cost of firm"s assets. Finding stock value when no dividends are paid: use the pe ratio and earnings. Pt = benchmark pe ratio x epst: benchmark pe could come from company"s historical values or industry average. Common stock: equity without priority for dividends or in bankruptcy. Methods for electing directors are cumulative voting and straight voting.