Equity Securities Flashcards
Payable Date
The date on which the dividend is paid
How often do dividends get paid on preferred stock?
quarterly
Treasury Stock characteristics (4 bullets)
1) Does Not Vote
2) No Dividends
3) Is not used in the EPS calculation
4) appears on the balance sheet as a deduction from issued shares
Liquid Asset Distribution (5* order first to last)
- tax
- secured debt
- unsecured debt
- preferred stock
- common stock
Current Yield Formula
Annual Dividend / Current Market Price = CY
Subscription Rights / Rights
A short-term privilege to existing shareholders of buying new shares at a discount price before the public offering.
Mortgage REITs
to lend money to building developers then pass interest income onto shareholders
General Partner
manage DPP, Limited Partnership, General Partnership
Special Situation Stock
undervalued stock and can have a random price increase due to any amount of reasons
Ex-Dividend Date
The stock begins to trade without a dividend.
If bought on or after the ex-dividend date owners will not receive a dividend
Participating Preferred Stock
preferred stock with a min. fixed dividend but not maximum
Outstanding Stock Formula
Treasury Stock - Issued Stock = Outstanding Stock
In a DPP, what would decrease the investor’s adjusted cost basis? (4 ideas)
1) distribution of property
2) losses
3) Non-deductible expense
4) Depletions and deductions for oil and gas
Callable Preferred Stock
issuer calling back preferred stock on a set date and set premium price over par value
DPPs Advantages (4)
1) income flows through to partners
2) capital risk is limited to cash investment
3) Capital costs can be depreciated
4) diverse and professionally managed
