Accounting - Stocks And Bonds Flashcards
What is “Equity”?
Money that is supplied by a company’s owners plus retained earnings.
What is “paid-in capital”?
What investors pay for a stake in a company, but not retained earnings.
What is a synonym of owning shares in a company?
Stock!
What are the two prevailing types of stock?
Common stock and preferred stock
Can we change preferred shares to common shares?
Yes, it is called “Convertible” shares, and may convert over time.
What does preferred stock imply (3)?
Regular dividend payments (like a debt!), lack of voting rights, higher liquidation rights
What are “securities”?
Fancy terms for stock and other debt/equity instruments
What is a bull market?
When prices in the stock marker rises constantly.
What is a bear market?
When prices in the stock market decrease constantly
What is a primary market?
Where companies issue their shares
What is a secondary market?
Where previously issued stocks are traded.
