Business Sector Flashcards
firm
an institution that hires productive resources and that organizes those factors to produce and sell goods and services
firm
business organization which owns and operates plants
plant
physical structures or location where business is conducted
industry
group of related firms which produce similar products
sole proprietor ship
business owned by a single individual
partnership
two or more individuals own and operate business in a partnership agreement
corporation
formed by charter granted by government
stock gives equity
equity gives ownership in a business
initial public offering (IPO)
primary
dividends
money given for success to stockholder
stock split
as of that day a stockholder will get more of a stock
p/e ration
price/net earnings
cumulative
when dividends skipped amount accumulated and firm cant pay any dividend to common stock holders until all accumulated dividends paid to preferred stock holders
IOU
long-term debt of corporation
maturity date
when borrows must pay back principal (usually 10-20 years)
par value
amount to be repaid when bond matures (principal)
coupon rate
annual interest paid on bond, expressed in terms of % of bond’s par value
debentures
bonds secured only by reputation of company
bond is retired
paid off by maturity date
bonds
usually issued in series each series has a unique maturity date and coupon rate to ensure that all bonds are not due at once
yield
coupon payment/ price paid (bond)
payoff
bonds, preferred stock. common stock
callable bonds
have provisions for early redemption
convertible bonds
option of being converted into a set number of common stocks
