1. Define the two major types of corporate stock. Discuss the characteristicsof each of the two types. How does an investor realise a returnon a stock investment?

2. Shareholders of corporate stock may have claims to a companys assets and income. Discuss and analyse this quote.

3. Using the Dividend Valuation Model, calculate the following: What is the value of a common stockthat paid a $1.50 dividend at the end of the last year and is expected to pay a cash dividend in the future. Dividends are expected to grow at 7% annually and the investors required rate of return is 11%.