Series 65 Flashcards
Authorised Stock Equation
Authorised Stock - Issued Stock = Outstanding Stock
Treasury Stock
Stock that has been repurchased by the corporation
Issued stock - outstanding stock = treasury stock
Preemptive rights
Right to maintain their current share in company
Rights offering
Existing shareholders have right to purchase new shares at a discount for up to 45 days (subscription price)
Current Yield
Annual income/ current market price
100 shares of TWT 9% preferred
All preferred are $100
$100 x 9%= $9 X 100 = $900 in earnings
Participating Preffered
Receive the dividends of a common shareholder over and above the stated preferred rate
Convertible preferred
Converted at $20 / share?
Convertible preferred allows to convert to common at fixed price (conversion price)
5 shares ($100/20)
Warrant
Security giving holder opportunity to buy common stock at fixed subscription price (always above market value when it is sold) for up to 10 years
American Depository Receipts (ADRs)
Receipt that represents foreign shares held abroad in US bank. Each ADR represents 1 to 10 foreign shares and can request delivery of foreign shares. Right to vote right to receive dividends
Bearer bond
Do not record owner’s information; bond certificate does not have owners legal name on it
Registered Bond
Owner’s name recorded on the books; buyer’s name on bond certificate
Principal only registration bonds
Owner’s name on bond certificate; clip coupons to receive semiannual payments
Fully registered
Owner’s name recorded for principal and interest. No clipping coupons payment sent directly. Most bonds in US
Book entry/ journal entry bonds
No physical certificate issued to owners. Bonds are fully registered and the owner knows who will receive. Only paper trail is the trade confirmation
