KEY TERMS Define the following terms:

a. Proxy; proxy fight; takeover

b. Preemptive right

c. Classified stock; founders’ shares

d. Marginal investor; intrinsic value (P^

0); market price (P0)

e. Required rate of return, rs; expected rate of return, ^rs; actual (realized) rate of return, rs

f. Capital gains yield; dividend yield; expected total return; growth rate, g g. Zero growth stock h. Constant growth (Gordon) model; supernormal (nonconstant) growth i. Corporate valuation model j. Horizon (terminal) date; horizon (continuing) value k. Preferred stock AppendixLO1