Part 1
As we have learned the value of a stock depends on dividends. A substantial percentage of companies listed on public stook exchanges don't pey dvidends, Dut investors are
nonetheless willing to buy shares in them. Wny? Your answer should include a detailed discussion of the pros and cons of buying dividend versus non-dividend/paying/shares
as well as some discussion about the types of shareholders that would invest in both.
Part 2
Suppose a company has a preferred stock issue and a common stock issue. Both have just paid a $2 dividend. Which class of share do you think will have the higher price and
why?