equity securities

  1. Security
    Other than an insurance policy or fixed annuity, any piece of securitized paper that can be traded for value.

    Includes: note, stock, bond, investment contract, a venture, certificate of interest in a profit-sharing or partnership agreement, certificate of deposit, collateral trust certificate, proof organization certificate, option on the security, or other instrument of investment commonly known as a security
  2. Debt security
    A security representing any investors loan to an issuer such as of Corporation, a municipality, the federal government, or a federal agency. In return for the loan, the issuer promises to repay the debt on the specified date and to pay interest
  3. Debt Investment
    Alone to a company in exchange for interest income and the promise to repay the loan at a future maturity date
  4. Over-the-counter (OTC) market
    Security exchange system in which broker-dealers negotiate directly with one another rather than through an auction on an exchange floor. Training takes place over computer and telephone networks
  5. New York Stock Exchange (NYSE)
    Auction market where buyers and sellers are matched by a specialist who maintains a fair and orderly market for a particular set of stocks. Largest stock exchange in the US
  6. Stock
    Represents equity or ownership in a company; equity security
  7. Bond
    Loan to accompany; debt security
  8. Balance sheet
    A report of corporations financial condition at a specific time
  9. Balance sheet equation
    • Assets = liabilities + net worth 
    • net worth = assets - liabilities
  10. Board of Directors (BOD)
    Individual selected by stockholders to establish corporate mantra policies. The board of directors decides, among other issues if and when dividends will be paid
  11. Common stock
    A security that represents ownership in a corporation. Holders of common stock exercise control by electing board of directors and voting on corporate policy
  12. Authorized stock
    Number of shares of stock that Corporation can issue.  Is stipulated in corporations state approved charter and may be changed by vote by stockholders
  13. Issued stock
    Equity securities authorized by the issuer's registration statement and distributed to the public
  14. Outstanding stock
    Equity securities issued by a corporation in the hands of the public; issued stock that you sure has not reacquired
  15. Treasury stock
    Equity securities that the issuing corporation has issued an repurchase from the public at the current market price
  16. Par value
    Dollar amount it sure assigns  to a security.
  17. Capital surplus
    Money a Corporation receives in excess of the stated value of the stock at the time of first sale
  18. Book value per share
    Measure of the net worth of each share of common stock. Calculated by subtracting intangible assets and preferred stock from: net worth, then dividing results by number of shares of common outstanding
  19. Market value
    Supply and demand value
  20. Book value
    Current liquidation value of share
  21. Statutory voting
    Voting procedure that stock will cast one vote per share own for each position. Benefits majority stockholders
  22. Cumulative voting
    Voting procedure that prevents stockholder either to cast all of their votes for any one candidate or to cast their total number of votes in any proportion they choose. Benefits minority stockholder
  23. Proxy
    limited power of attorney from the stockholder authorizing another person to vote on stockholder issues according to the first stockholder's instructions.
  24. Securities exchange security exchange commission (SEC)
    Commission created by Congress to regulate the securities market and protect investors.
  25. Preemptive rights
    Stockholders legal right to maintain her proportionate ownership by purchasing newly issued shares before the new stock is offered to the public's
  26. Limited liability
    Investors right to limit potential losses to no more than the amount invested. Equity shareholders, such as corporate stockholders and limited partners, have limited liability
  27. Forward stock split
    Increase the number of shares and reduces the price without affecting the total market value of shares outstanding
  28. Reverse split
    Reduction in the number of a Corporation shares outstanding to increase the par value of its stock warrants earnings-per-share. Market value of total number of shares remains the same
  29. Short
    Term used to describe the selling of the security contract, or commodity that the seller does not own
  30. Short sale
    Sale of a security that the seller does not own, or any sale consummated by the delivery of a security borrowed by or for the account of the seller
  31. Capital gains
    Profit realized when the capital asset is sold for a higher price than the purchase price
  32. Realized gain
    Amount the taxpayer earns when he sells an asset
  33. Unrealized gains
    Amount by which a security appreciates in value before it sold. Until it is sold the investor does not actually possess the sale proceeds
  34. Preferred stock
    Equity security that represent ownership in a corporation. It is issued with the stated dividend, which must be paid before dividends are paid to common stockholders. Carries no voting rights
  35. Straight preferred (noncumulative)
    Equity security that does not have to pay dividends in arrears to the holder 
  36. Cumulative preferred stock
    Equity security that offers the holder any unpaid dividends in arrears  is dividends accumulate and must be paid to cumulative preferred stockholder before any dividends may be paid to common stockholders
  37. Convertible preferred stock
    Equity security that may be exchanged for common stock at specified prices or rigs. Dividends may be collective or noncumulative
  38. Participating preferred Stock
    Equity security that offers the holder of shared of corporate earnings remaining after all senior securities have been paid a fixed dividend. Payment is made in addition to pics dividend stated on the certificate and maybe cumulative or noncumulative
  39. Callable preferred stock
    Type of preferred stock issued with a provision allowing the corporation call in the stock at a certain price and retired
  40. Dividends
    Distribution of a corporations earnings. Maybe in the form of cash, stock, or property. BOD must declare dividends
  41. Cash dividend
    Money paid to corporations stop older out-of-court rations current earnings or accumulated profits
Card Set
equity securities
Kaplan series 7 ch. 1