The Corporation and Financial Markets Flashcards
Sole proprietorship
the owner takes on all liability
Limited partnership
has 2 types of owners, general and limited partners. GPs have the same rights and privileges as partners but LP’s liability is limited to their investment
Limited liability corporation
a limited partnership w/o a GP. All owners have limited liability and they can also run the business
Corporation
a legally defined being separate from its owners. Owners or employers are not liable for any obligations the corporation enters into.
Stock
shares that the ownership stake of a corporation is divided into
Equity
collection of all outstanding shares of a corporation
Dividends
payments made at the discretion of the corporation to its equity holders (shareholder/stockholder). Usually receive a share of dividend payments that is proportional to the amount of stock they own
Liquidation
shutting down a business and selling off its assets
Primary market
where new shares are issued to investors
Secondary market
where continued trading occurs
NASDAQ
National Association of Security Dealers Quotation. Stock exchange
Bid price
price a market maker is willing to buy a stock
Ask price
price a market maker is willing to sell a stock
Bid-ask spread
difference between bid prices and higher ask
Limit order
an order to buy or sell stock at a fixed price
