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What features of common stock indicate ownership in the corporation versus preferred stock or bonds?...

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Finance

  1. What features of common stock indicate ownership in the corporation versus preferred stock or bonds?
  2. In what two ways does a shareholder benefit from ownership?
  3. How does internal growth versus the infusion of new capital affect the original shareholders?
  4. Describe the process for common stock valuation.
  5. During 2012, Starbucks Coffees common stock had been selling for between $30 and $60. Its most recent earnings per share was $1.73, and the firm was expected to pay a dividend of $0.68. The companys return on equity (net income , total common equity) has been 25 percent. You are planning on investing in 100 shares of the stock, but you want a 17 percent return on your investment. Given the limited information, what growth rate would you estimate for Starbucks? What price would be required for you to earn your required return?

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