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25 Cards in this Set

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  • Back
Affiliated Directors
senior executives (i.e. presidents, CEO) who also serve on the board
Nonaffiliated Directors
directors who are not otherwise affiliated with the corporation
Transfer agent
hired by the issuer to keep a list of all registered stockholders and to be responsible for canceling old stock certificates
hired to audit the transfer agent and to make certain that the company does not issue more shares than its charter authorizes.
Treasury Stock
Shares issued and now owned by the company
Declaration Date
date the board of directors “declares” a dividend
Record Date
the last possible day to own shares and receive a dividend
Payment Date
the date the dividend is sent to shareholders
Ex-Dividend Rule (Cash)
1. Set by the SRO. A stock will typically trade ex-dividend on the second business day prior to the record date.
2. An individual purchasing a stock on or after the ex-dividend date will not receive the quarterly cash dividend
3. As a result of the dividend payment, the company’s assets will be reduced. Therefore, on the ex-dividend date, the stock price will be reduced by an amount equal to the dividend to be paid.
Ex-Dividend Rule (Stock)
For stock dividends and stock split, the ex-dividend date is the business day following the payable date. To insure that the proper shareholder receives the additional shares, the stock will trade with a due bill attached, from the record date through to the payable date.
Avaliable to: Existing Shareholders
Price: Below Market
Time: Short-term
Avaliable to: Existing Shareholders
Price: Above Market
Time: Long-Term
Statutory Voting
shareholders vote each of their shares once for each direct slot being contested
Cumulative Voting
shareholders may multiply the number of shares they own by the number of directors being elected and cast all the votes any way they want
Cumulative Preferred Stock
All the preferred dividends that are in arrears (owed) must be paid before the common stockholders can receive any dividends. Most preferred stock is cumulative.
Noncumulative Preferred Stock
Dividends in arrears are not paid to stockholders. Only the current year’s dividends needs to be paid before common stock dividends may be paid.
Convertible Preferred Stock
investors can exchange their shares for common stock at a specified price, at their discretion. The par value of preferred stock exchanged for each share of common is called the conversion price.
Conversion ratio
the number of shares of common stock that the investor can receive for each share of the preferred.
Current Yield (Dividend Yield)
i. Measures the annual income an investor receives from an investment compared to its current market price.
ii. Calculation: (dividend x # of periods in a year) / share price (e.g. .25*4/50 = 2%)
Blue-Chip Stocks
High-grade issues of major companies that have long and unbroken records of earnings and dividend payments.
Growth Stocks
An issue of a company whose sales, earnings, and share of the market are expanding faster than the general economy and the industry average. It usually retains most of its earnings to finance expansion and therefore pays little or no cash dividends.
Defensive Stocks
Stocks of companies that are resistant to change (i.e. necessary services; electric and gas, food, tobacco, soft drinks, and candy)
Income Stocks
Stocks of companies that pay higher than average returns. Their dividends are high relation to their market price (e.g. Utility stocks).
Cyclical Stocks
Stocks of companies whose earnings fluctuate with the business cycle (e.g. steel, cement, machine tools, and automobiles).
American Depository Receipts (ADR)
i. Used to facilitate the trading of foreign stocks in the US
ii. ADR represents a claim to foreign securities with the shares themselves being held by U.S. banks abroad.
iii. ADRs trade in the U.S. markets either on an exchange or OTC and are priced in U.S. dollars (although holders are still subject to foreign currency risk).
iv. Dividends are paid in U.S. dollars.
v. ADR shareholders have dividend rights, but they would not directly receive preemptive rights.