Chapter 12

Front 1

stockholder

Back 1

are the owners of the corporation

Front 2

dividends

Back 2

are the part of the corporation's profits paid to stockholders

Front 3

capital gain

Back 3

this is an increase in the value of the stock above the price initialy paid for it

Front 4

common stock

Back 4

is a type of stock that pays a variable dividend and gives the holder voting rights

Front 5

preferred stock

Back 5

is a type of stock that pays a fixed dividend carries no voting rights

Front 6

income stocks

Back 6

stocks that have a consistent history of paying high dividends

Front 7

proxy

Back 7

is a stockholder's written authorization to transfer his or her voting rights to someone else

Front 8

growh stocks

Back 8

are stocks in corporations that reinvest their profit into the business so that it can grow

Front 9

blue chip stacks

Back 9

are stocks of large, well-established corporations with a solid record of profitability.

Front 10

par value

Back 10

is an assigned dollar value

Front 11

market value

Back 11

which is the price for wich the stock is bought and sold in the marketplace

Front 12

earnings per share

Back 12

are a corpration's aftertax earnings divided by the # of common stocks shares outstanding

Front 13

bull market

Back 13

is a prolonged period of rising stock prices and a general feeling of investors optimism

Front 14

bear market

Back 14

is a prolonged period of falling stock prices and a general feeling of invertor pessimism

Front 15

leverage

Back 15

the use of borrowed money to buy securities

Front 16

short selling

Back 16

is selling stocks borrowed from a broker that must be replaces at a later time

Front 17

stock split

Back 17

is an increase in the numder of outstanding sharesof a company's stock

Front 18

direct investment

Back 18

buying stocks directly from a corporation

Front 19

dividend reinvestment

Back 19

using dividends previously earned on the stock to buy more shares