Ordinary shares are the most common class of share and are also known as the "equity capital" of the company. From Inland Revenue (http://www.inlandrevenue.gov.uk/manuals/svmanual/03/SVM03020.htm) ordinary shares have 4 main characters;

1. The right to all profits remaining after the payment of any preference dividend and to whatever dividend is voted to them by the shareholders on the advice of the Board at a general meeting.
2. Holders of these shares would hope to share in the prosperity of the company by way of increased dividends
3. The right on liquidation to all surplus assets after the preference shareholders have been paid off
4. The right to attend and vote at general meetings.

With these characters the company must valuate the shares to let the shareholders to know what the future holds for their dividends which are know as "the future cash flows that will accrue...