Why a firm may repurchase its own common stock

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Reference no: EM13928772

1. Define the following terms associated with common stock:

a. Nonvoting stock d. Stock dividend

b. Stock split e. Book value

c. Reverse stock split f. Treasury stock

2. Does the retained earnings figure on a company's balance sheet indicate the amount of funds the company has available for current dividends or capital expenditures? Explain fully.

3. Discuss the reasons why a firm may repurchase its own common stock.

4. Explain the differences between par value, book value, and market value per share of common stock.

5. Discuss the various stockholder rights.

6. What factor or factors make the valuation of common stocks more complicated than the valuation of bonds and preferred stocks?

7. According to the general dividend valuation model, a firm that reinvests all its earnings and pays no cash dividends can still have a common stock value greater than zero. How is this possible?

Reference no: EM13928772

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