Chapter 7 - equity markets and stock valuation Flashcards
dividend growth model
a model that determines the current price of a stock as its dividend next period divided by the discount rate less the dividend growth rate
dividend yield
a stock’s expected cash dividend divided by its current price
capital gains yield
the dividend growth rate, or the rate at which the value of an investment grows
cumulative voting
a procedure in which a shareholder may cast all votes for one member of the board of directors
straight voting
a procedure in which a shareholder may cast all votes for each member of the board of directors
proxy
a grant of authority by a shareholder allowing another individual to vote his or her shares
dividends
payment by a corporation to shareholders, made in either cash or stock
preferred stock
stock with dividend priority over common stock, normally with a fixed dividend rate sometimes without voting rights
primary market
the market in which new securities are originally sold to investors
secondary market
the market in which previously issued securities are traded among investors
dealer
an agent who buys and sells securities from inventory
broker
an agent who arranges security transactions among investors
members
as of 2006, a member is the owner of a trading license on the NYSE
designated market makers (DMMs)
NYSE members who act as dealers in particular stocks. Formerly known as “specialists”
floor brokers
NYSE members who execute customer buy and sell orders
