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23 Cards in this Set
- Front
- Back
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Proxy
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A document giving one person the authority to act for another, typically the power to vote shares of common stock.
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Proxy Fight
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An attempt by a person or group to gain control of a firm by getting its stock-holders to grant that person or group the authority to vote its shares to replace the current management.
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Takeover
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An action whereby a person or group succeeds in ousing a firm's management and taking control of the company.
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Preemptive Right
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A provision in the corporate charter or bylaws that gives common stockholders the right to purchase on a pro rata basis new issues of common stock (or convertible securities).
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Classified Stock
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Common stock that is given a special designation such as Class A or Class B to meet special needs of the company.
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Founders' Shares
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Stock owned by the firm's founders that enables them to maintain control over the company without having to own a majority of stock.
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Marginal Investor
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A representative investor whose actions reflect the beliefs of those people who are currently trading a stock. It is the marginal investor who determines a stock's price.
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Market Price p0
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the price at which a stock sells in the market.
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Growth Rate g
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The expected rate of growth in dividends per share.
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Required Rate of Return, Rs
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The minimum rate of return on a common stock that a stockholder considers acceptable.
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Expected Rate of Return,
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The rate of return on a common stock that a stockholder expects to receive in the future.
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Actual (Realized) Rate of Return
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The rate of return on a common stock actually received by stockholders in some past period. may be greater or less than expected rate or return, and or required rate of return.
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Dividend Yield
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The expected dividend / the current price of a share of stock.
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Capital Gains Yield
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The capital gain during a given year / the beginning price.
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Expected Total Return
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The sum of the expected dividend yield and the expected capital gains yield.
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Constant Growth (gordon) Model
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Used to find the value of a constant growth stock.
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Zero Growth Stock
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A common stock whose future dividends are not expected to grow at all; that is, g=0.
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Supernormal (Nonconstant) Growth
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The part of the firm's life cycle in which it grows much faster than the economy as a whole.
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Horizon (Terminal) Date
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The date when the growth rate becomes constant. At this date, it is no longer necessary to forecast the individual dividends.
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Horizon (Continuing) Value
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The value at the horizon date of all dividends expected thereafter.
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Corporate Valuation Model
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A valuation model used as an alternative to the discounted dividend model to determine a firm's value, especially one with no history of dividends, or the value of a division of a larger firm. The corporate model first calculates the firm's free cash flows, then finds their present values to determine the firm's value.
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Intrinsic Value
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?
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Preferred Stock
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?
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