Equity Flashcards
What are the registrar’s responsibilities?
- Maintain record of stockholder names & address
- Makes sure company doesn’t issue more than auth.
- acts as watchdog over transfer agent
What are the transfer agent’s responsibilities?
- cancels old shares which have been sold and issues new shares in the buyer name
- keeps an accurate record of shareholders (daily)
- mails items to shareholders
What are the 2 types of voting for the BOD?
- Statutory Voting
- 1 vote per 1 share - Cumulative Voting
- # of shares x # of BOD chosen
What are the main rights of shareholders?
- To Vote
- Inspect books and records
- Transfer ownership (negotiable)
- Maintain proportionate ownership (pre-emptive right)
- Receive dividends
- Rights to assets upon dissolution
What is the last day to buy a stock a get a dividend that has been declared?
3 BUSINESS days before record date
What is the Ex-dividend rate?
First day that the stock trades without the dividend (2 business days prior to record date)
What percentage of dividends received by a corporate investor are non-taxable for preferred stock?
70% (80% if corp. owns more than 1/5 of outstanding shares)
What influences the prices of preferred stock?
Interest rates
It is NOT affected by future expectations of company!
What is the formula for the current yield?
Current yield = annual income/market price
What is the formula for market price?
Market price = annual income/market yield
What is a warrant?
The long term option to buy a stock at a fixed price
What is a stock right?
Short term option to buy stock at a fixed price
What determines if an ADR is sponsored?
If it is exchange listed
Where does an ADR trade if it is not sponsored?
OTC
In what currency are dividends from ADRs declared and paid?
They are declared in foreign currency but paid in US dollars
