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Equity InvestmentsModule 4 of 6

Overview of Equity Securities

5

Concepts

3

Formulas

0

Decisions

2

Quiz Questions

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Key Concepts

5 concepts covered in this module.

Common Shares

Residual claim, voting rights, dividends not guaranteed. Represents ownership. Risk: last in liquidation.

Preference Shares

Fixed dividend, priority over common. Cumulative: missed dividends accumulate. Participating: share in excess earnings.

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Formulas

3 essential formulas for this module.

Book Value per Share

BVPS = (Total Equity - Preferred Equity) / Common Shares Outstanding

Where: Accounting value of equity per share

ROE

ROE = Net Income / Average Shareholders' Equity

Where: Return generated on shareholders' investment

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Mind Map

Visual overview of how concepts connect in this module.

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Common Shares

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Answer
Residual claim, voting rights, dividends not guaranteed. Represents ownership. Risk: last in liquidation.
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