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15 Cards in this Set

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What is a stock?
It represents equity or ownership in a company.
What is a bond?
It represents a loan to a company.
How do you calculate Net Worth?
Assets equals liabilities plus net worth. Or Assets minus liabilities equals networth.
What is a security?
An investment that represents either an ownership stake or a debt stake in a company.
What does FINRA stand for?
Financial Industry Regulatory Authority
An individual's stock ownership represents his proportionate interest in a compoany.
If a company issues 100 shares of stock, each share represents an identical 1/100 or 1% ownership position in the company.
What are the two types of stock a company can issue?
Preferred and Common Stock
What are the characteristics of preferred stock?
Normally pays a fixed, semiannual dividend and has priority claims over common stock.
What are the four ways Common Stock can be classified?
Can be classified as authorized, issued, outstanding, and treasury.
What is authorized stock?
Refers to a specific number of shares the company has authorization to issue or sell
What is Issued Stock?
Issued Stock has been authorized and distributed to investors.
What is Outstanding Stock?
Outstanding Stock includes any shares that a company has issued but has not repurchased.
What is Treasure Stock?
Treasury Stock is stock a corporation has issued and subsequently repurchased from the public.
ABC Company has authorized 1 million shares of common stock. It issued 800,000 shares one year ago. It then repurchased 200,000 shares for its treasury. How many shares of ABC stock are outstanding?
Issued Stock minus Treasury Stock equals Outstanding Stock. Therefore, 800,000 minus 200,000 equals 600,000.
For investor's is Par Value a relavent value?
No. It is an arbitrary value the company gives the stock in the company's articles of incorporation and has no effect on the stock's market price.