fiance ch 1 Flashcards
where are the shares of public corporations traded
on a exchange
who are public corporations regulated by
the government
what does not offer low fees and have high risk
hedge funds
what should shareholders look for in a board of directors
they should be independent
what is the time a employee has to wait before they can use there stock option called
the vesting period
what is the difference from a primary market and a secondary one
in primary markets the company is issuing and selling the shares
who issues and sells the shares in a secondary market
mostly other investors either instituions or individuales
what are the two types of coporations that are subject to double taxation in canada
public and private corporations
do partnerships have shareholders
no the partners are the only people who hold shares in the business
what are insurance companies like manulif and sunlife
financial intermediaries
why would a cleint want a lawyer to work on contingency
if they are not sure they will win the case or they dont have the money up front. (basically use it if its high risk)
what is contingency
when the lawyer would be paid a portion of the earrnings of the case rather then a upfront cost
what is the definition of a corporation
a seprate legal entity from the owners
what is a poison pill in a corporation
its a shareholder takeover defence (like if x number of shares are bought be one person automatically they buy shares)
what are stock grants
its a incentive device given to managment and employees to encourage them to work harder since if they do the value of the shares they have will go up
what happens to the employees stock grants if they leave before the end of the vested period
they loose it all so this does keep decrease employee turnover but also increases number of people doing the bare minimum
what is profit sharing
when the employees recive a cutback based on the companies for their preformance
what is the exersize period on a employees stock option
the time frame that you can buy the stock at that price
what is the vesting period
the time you have to wait before selling the stock
what is ment by option
literally means the employee have a option to either buy or not buy the stock so if the price goes down they dont take a loss but if it goes up they still buy at the option price
what is the retention affect
when individules decide to continue to invest in the company
what causes the retention affect to reverse
when the stock price falls below the strike price
what does the company have to do when you exersize your option
they have to buy shares on the market at current price and sell to you at your option price
what are common problems with stock option
companies give them out a lot in the early stage and they are worth a lot more later one
what is the primary market
this market is for companies sell direct to investors
what is the secondary market
where regular people buy stocks
what are intermediaries
etfs, banks, hedge funds
what are mutral funds
bonds and equities
what is a index fund
a collection of shares of companies think of the s&p500
