Business Flashcards
Restricted stock
Stockholder cannot sell the shares until a certain amount of time passes, often three to four years. And the holder may have to forfeit the shares if he/she leaves.
Restricted stock isn’t taxed until vested, and treated as
Stock option
The right to buy a set of shares at preset price at some point in the future.
“Tesla’s board, the proxy states, on Aug. 1, 2012 gave Mr. Musk options to buy nearly 5.3 million Tesla common shares at $31.17. However, Mr. Musk can’t exercise all of the options until Tesla’s market capitalization reaches $43.2 billion and ten specific “operational milestones” have been achieved by 2022”
Escrow (n) (v)
Bond, document kept in custody by a third party
Escrow agent
Ordinary resolution
Ordinary resolution is a written resolution that has been passed by one or shareholders represent majority of total shares (more than 50%)
Special resolution
Special resolution is a written resolution that has been passed by 75% of total shares of the company. (Singapore Company Acts)
Transferor
The person that transfers an asset to other (transferee)
Share capital
share capital is part of company’s capital. Formerly, total capital of the company should come from its owners in exchange for shares
Convene (v)
To arrange for people to come together for a meeting
Winding-up
The distribution of company’s assets among its creditor and members prior to its dissolution. Winding-up can be voluntarily or by court
Liquidator
A person appointed by the company or court that regulate the company’s affair on liquidation.
Price premium
A price of a product that is higher than average price in the market.
“Over the past 20 years, semiconductor companies enjoyed an average price premium of 32.5% over other companies in the S&P 500 stock-index, as measured by their ratio of stock price to earnings, according to analysts at Sanford C. Bernstein”
Preferred dividend
Preferred stocks usually have much higher dividend rate than normal stock.
Earning Per Share (EPS)
(Net income - preferred dividend)/weighted outstanding share.
Weighed outstanding share: because shares can change by month, so the weight is the months of an unchanged number of shares.
Price earning ratio (PE)
Market value / earning per share
- higher value means higher expectation that the business will generate more in the future. - average value is 20-25
