How markets and investors value stock

Topics: Stock market, Stock, Preferred stock Pages: 4 (565 words) Published: December 3, 2014

Markets and Investors Stock Evaluation
Ahelina Sloan, Rogers Glover, Michael Cooks, and Kim Fisher
December 1, 2014
Dr. Eduardo Haynes

How Markets and Investors value stocks

Collectively, Team B believes stock is a security that shows possession in a company or asset and symbolizes claim from investors or the owner. The market and invests are interested in two types of stocks which are common and preferred. Common stock typically gives a share of ownership in a corporation, to which gives owners and investors rights to vote or make decisions, and a right to receive dividends. Preferred stock, gives no decision-making or voting rights, but has a greater return on assets and earnings to investors than the common shares. When preferred stocks are purchased, the investor has an expectation when dividends are to be received because of the regular intervals they are paid. With common stocks, the board of directors determines if a dividend will be paid or not. When evaluating stocks, there are two key variables, which are profitability and growth (Mcconnache, 2007). Stock ownership is decided by the quantity of shares a shareowner has comparative to the quantity of outstanding shares. When appraising stocks, a valuation should include all risk, expansion plans and a strategy to diversify. With Internet technology investors have a considerable amount of resources to measure the profitability of stocks. This technology allows investors to aggressively and vigorously searches for corporations that can provide a high return on investment. Investors should be interested in the future growth of a corporation vice only considering the present day value. New ideas should be considered a strategy when estimating the future growth and profitability of a stock cash flow ("How To Value A Stock", 2009). The market has a tremendous effect on the value of a stock and its profitability through supply and demand....
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