Jigdan college

1. The liquidation value of a firm is based on its future cash flows. 2. The book value of a firm is equal to the common stock equity account on its balance sheet 3. In valuing a security, we only need to know what the future cash flows will be 4. Long-term debt securities and bonds are equivalent terms 5. Common stocks that pay no dividends are generally priced lower than dividend-paying stocks 6. The yield on common stock comes from two sources: the dividend yield and the capital gains yield. 7. There is more uncertainty associated with the future returns of common stocks than with the returns of bonds and preferred stock