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ALL _______ Dividends increase the supply
of stock, which decreases the price
Large stock dividends have a significant
effect on the price of stock, so the current
market value can NOT be used to value
large stock dividends – and the only
remaining choice is PAR or STATED VALUE
Small stock dividends have only a minor
effect on prices, so the current stock price
is still used to value the stock dividend
Reduction in the price due to an increase
in numbers of shares is called “dilution
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How can shareholder value be measured for a public company?
It can only be measured by the value of dividends and stock price, or for non-dividend paying companies solely by stock price.
What is cost basis of stock?
The cost basis is the original value of an asset adjusted for stock splits, dividends or capital distributions. It is used to figure capital gain or loss for tax purposes
How do you calculate stockholders equity?
You can get the Stockholders Equitys by finding out what the preffered and common stocks are at par value which is the minimum a company can issue their stocks for. Then figuring out the additional paid in capital which is the market price minus the par value for both the preffered and common stock. Once you find that, you add retained earnings. If the retained earnings is not given, then you take your net income minus dividends and treasury stock.
How are cash flows and the firms stock price related?
In an ideal world, the value placed on a shares value is the current value of all future dividends issues. The greater a firms cash flow, the higher you would expect the dividend to be. Not living in the real world, and not having a crystal ball, the actual share price is determined more by market sentiment and speculation. Thus, there is often no real relationship between a firms cash flow, and its stock price.
How is a cancelled Cheque accounted for?
A Cancelled Cheque is not accounted for anywhere. The cheque once cancelled loses all monetary value. It is just a worthless piece of paper that has no value. So no one usually keeps track of what happens to it. In other words no one keeps an account of it.
