chapter 1 Flashcards
Statutory voting
allows the shareholder to vote one time per share for each seat on the board of directors. For example if an investor owns 10 common shares and two board seats are to be filled, the investor has up tp 10 votes to cast for each of two directors seeking election to the board
Cumulative voting
allows the shareholder to pool votes together and then allocate them as desired. the example above, the shareholder has a total of 20 votes for the 10 shares that are held ( 10 votes for each of the two sears) The shareholder can cast 20 votes for on candidate or 15 for on candidate and 5 for the other, or any other way they would like
Pre- Emptive rights/ rights
give investors the rights to maintain a proportionate interest in a company’s stock, not increase it
Warrants
give an investor the ability to purchase a company’s stock at a fixed price for a set period of time; generally, they provided by the company in conjunction with another security ( EX a bond or preferred stock) to make the security more attractive to get
ADR’s
Faciltate the U.S trading of foreign common stock
Dividends
Distributions of a company’s profits to shareholders; they generally paid in cash or in additional shares of stock and must be declared by the company’s board of directors
transfer agent
records changes of ownership in security, responsible for ensuring investors receive the appropriate shares in a corporate event such as a stock split or stock dividend
Dividend procedures
for a regular wat trade ( which settles T+1) the ex- date is the business day before the record date
In the payment of a cash dividend for a regular way transaction, the order of the dates is ‘DERPS’
-Declaration date
-EX-dividend date
-Record date
-Payable Date
Stock Split Calculation
of shares after the split = multiply the number of shares by the first number of the split and divide by the second
new price= divide by first number and multiply by the second
