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The Privately Held Firm Does Not Have a Share Price

question 9

True/False

The privately held firm does not have a share price.It,therefore,simply focuses on generating current income,primarily dividend income,to generate the returns to its ownership.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a higher claim on its assets and earnings than common stock.

Par Value

A nominal or face value assigned to a share of stock by the company's charter, not necessarily reflecting its market value.

Yielding

The act of producing or generating an income or return from an investment over a specified period of time.

Constant Growth Model

A method to estimate the value of a stock by assuming a constant rate of dividend growth.

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