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Preferred stock pays a constant dividend and is valued as a perpetuity.
Preferred Stock
A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically with fixed dividends and no voting rights.
Constant Dividend
A dividend policy in which a firm aims to distribute a fixed or constant amount of money to its shareholders as dividends on a regular basis.
Perpetuity
A financial concept representing a series of equal payments that continue indefinitely.
- Acquire knowledge on the core principles of appraising securities by examining future cash flows.
- Comprehend how dividend payout schemes and expectations of growth affect stock market valuation.
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Learning Objectives
- Acquire knowledge on the core principles of appraising securities by examining future cash flows.
- Comprehend how dividend payout schemes and expectations of growth affect stock market valuation.
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