Chapter 12: Investing In Stocks

Front 1

Stockholders

Back 1

the owners of a corporation

Front 2

dividends

Back 2

the part of a corporations profit paid to stockholders

Front 3

capital gain

Back 3

an increase in the value of the stock above the price initially paid for it

Front 4

common stock

Back 4

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

Front 5

proxy

Back 5

a stockholders written authorization tto transfer his or her voting rights to someone else

Front 6

preferred stock

Back 6

a type of stock that pays a ficed dividend and carries no voting rights

Front 7

income stocks

Back 7

stocks that have a consistent history of paying high dividends

Front 8

growth stocks

Back 8

stocks in corporations that reinvest their profits into the buisness so that it can grow

Front 9

blue chip stocks

Back 9

stocks of large well established corporations with a solid record of profitability

Front 10

par value

Back 10

an assigned dollar value

Front 11

maket value

Back 11

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

Front 12

earnings per share

Back 12

a corporations after-tax earnings dividend by the number of common stock shares oustanding

Front 13

bull market

Back 13

a prolonged period of rising stock prices and a general feeling of investor optimism

Front 14

bear market

Back 14

a prolonged period of falling stock prices and a general feeling of investor pessimism

Front 15

leverage

Back 15

the use of borrowed money to buy securities

Front 16

short selling

Back 16

selling stock borrowed from a broker that must be replaced at a later time

Front 17

stock split

Back 17

an increase in the number of outstanding shares of a companys stock

Front 18

direst investment

Back 18

buying directly you avoid brokerage and other purchasing fees

Front 19

dividend reinvestment

Back 19

using dividends previously earned on the stock to buy more shares