Equity securities Flashcards
Final Prospectus
- Due 25 days after effective Date
- OTC not on NASDAQ
- 90 days if corporation hasn’t previously issued stock to the public
- 40 Days if stock has been previously listed
Well Known Seasoned Issuer
1
Preferred Stock Optional Features
Cumulative
- Cumulative - max dividend stock will pay
- will received dividends that would have been paid in the past when a dividend is declared
Preferred Stock Optional Features
Adjustable
- Adjustable - changes based on a benchmark security such as a T-bill
- because the dividend adjust or “floats”, the stock price stays stable
Preferred Stock Optional Features
Convertible
-Convertible - dividend and bankruptcy protection with potential price appreciation of common stock
-issues a lower stated dividend
-conversion price and conversion ration determined at stocks issuance
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Preferred Stock optional features
callable
-buyer paid par or specified premium over par
Preferred Stock optional features
Participating
-allows preferred to participate with common shares in earnings of exceptional year
Preferred Stock - (Straight/Basic)
-Created to yield a fixed stated return comparable to bonds
-Paid before common stock
-expressed as a % of par value (typically $100)
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Warrants
- long term devices
- issued with an exercise price above market
Settlement Date -
Corporate Securities:
- regular way: normally 3 days after trade date
- cash settlement: trade and settlement same date
Rights of common stockholders
- vote
- transfer ownership
- received dividends once declared
- inspect corporations books
- preemptive rights
- junior claims in event of liquidation
What’s on a Stock Certificate?
- issuing corporation
- registered owner
- registrar
- transfer agent
- # of shares
- authorized signature of corporate officer
Transfer Agent
one who changes buyer and seller name on stock cert
Registrar
oversees transfer agent to make sure number of shares equal outstanding shares
Stock Dividends
stock is given instead of cash
