ch 4 Flashcards
Corporation
type of business organization that is a legal entity separate from its owners
shares
units used to measure common stock ownership
proxy ballot
a ballot cast on behalf of an absent shareholder on certain corporate matters
proxy statement
an informational document describing the issues to be voted upon
voting class
a class of stock that carries voting as ownernship rights (popular)
non-voting class
a class of stock that varries very little of no voting rihgts, but provides ownership (unpopular)
hostile takeover
an attempt by one company to take over another company without the approval if the targets company board of directors
Stock Splits
a corporate action in which a company divides its existing shares into multiple shares
What does a stock split do to the stocks individual price per share?
it drops
Is a stock split a good or bad sign for investors
Good. firm is successful and has faith in gowth prospects
Reverse Stock Split
corporate action in which a company combins its existing shares into fewer shares
Round Lot
100 shares of stock
Is a reverse stock split a good sign?
NO
Capital Gains
the profit earned by selling an asset for an amount greater than what it was paid for
dividends
company profit distributed to shareholders
declaration
date that a firms board of directors announces that a dividend will be paid to shareholders
ex-dividend (ex date)
date at which the security will trade without the divident
Record
date on which the company looks at its records to determine the shareholder
Payable
date on which the dividend is sent to the holders
Preferred Stock
investment with a corporation that entitles ownership to a fixed dividend priority over common shares and no ownership interest
Cumulative Preferred
issuer may not make any common share dividends untill paying all preferred dividends in arrears
Callable Preferred
issuer retains the right to buy back shares after a set date
Convertible Perferred
Shareholder has the opportunity to conver preferred shares into common shares
Participating Preferred
shareholder is entitled to receive extra dividends (usually reserved for only common shareholders)
