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7 - Creditors Stockholders • Shows relationship between...

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Stock Value Terms Market value Price one can buy or sell one share of stock for; varies with company performance and economy Redemption value Set price company is required to pay to retire preferred stock Liquidation value Required payment to preferred shareholders if the company liquidates Book value Common equity # of common shares outstanding Return on Assets (ROA) Measures company’s use of assets to earn income for financers of the business
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Unformatted text preview: Creditors Stockholders • Shows relationship between net income and equity Computed only on common stock • Should be higher than return on assets Stockholders risk more than bondholders Equity Transactions on the Cash Flow Statement • All equity transactions are financing activities • Financing inflow Issuing stock • Financing outflow Purchase of treasury stock Payment of dividends...
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