Stock Valuation Essay Example | Topics and Well Written Essays - 250 words - 2

contrast Valuation - Essay ExampleCommon stockholders atomic number 18 entitled to voting where shareholders come together and are recipients of dividends while a preferred stock is a bond at the same time, that is, it is a tag between a common stock and a bond (Damodaran, 2007). Some of its characteristics include scripted return, need of maturity in most cases, ability to recover as a mature bond and metempsychosis to a common stock.In case of company bankruptcy, preferred stock holders are a anteriority in the payment of liquidated assets then the common stockholders. A direct implication of this is that the former mentioned stock resource is high regarding liquidation and some of its dividends are preferred. There are instances where dissolving a company results to no payments to the common stockholder. Therefore holding the same value for stock by investors goes against the principles of the two kinds of stocks in discussion. An dissymmetry of the stock market is therefo re inevitable in the long