Chapter 13 Flashcards
american depository receipts
A receipt for
foreign stocks held by a trustee. The receipts
trade on U.S. stock exchanges instead of the
actual stock.
ask price
The price market makers sell the stock
for.
bid price
The price market makers pay for the
stocks.
common stakeholder
individuals who have an
ownership interest in a firm, with rights to
receive dividends and vote on major corporate
issues.
generalized dividend model
Calculates that the price
of stock is determined only by the present value
of the dividends.
gordon growth model
A simplified model to compute
the value of a stock by assuming constant dividend growth.
NASDAQ
Preferred stock
Stock on which a fixed dividend
must be paid before common dividends are
distributed. It often does not mature and usually does not give the holder voting rights in the
company.
price earnings ratio (PE)
A measure of how much the
market is willing to pay for $1 of earnings from a
firm.
Super display book (SDBK)
