Equity Basics
Types of Common Stock
Income & Dividends
Calls, Puts, Warrants, & Rights
Odds & Ends
100
A public companies owners.
What are Shareholders?
100
This type of common stock typically pays little or no dividends to their shareholders, but it has a greater potential for capital appreciation in the long-term.
What is a Growth Stock?
100
This type of stock receives preference during payments of dividends and payment at liquidation.
What is preferred stock?
100
Companies typically attach these to stocks or bonds offerings to give investors an added incentive. However, they may be detached and sold separately. They give the purchaser the ability to buy common stock in the future. They are good for several years, and they may be perpetual.
What is what are Warrants?
100
The type of stock which typically pays little or no dividend, so may be advantageous to an investor who is looking to for a long term investment which has little or no tax until sold.
What are Growth Stocks? Note: Taxes are typically paid as capital gains (which are subject to special tax treatment) when shares are sold.
200
When stock is issued and subsequently purchased by the corporation. This type of stock does not have voting rights and does not receive dividends.
What is a Treasury Stock?
200
Common stocks of companies that pay higher than average dividends to their shareholders. These stocks are attractive to long term investors seeking current income
What are Income Stocks?
200
They are responsible for making the decision of whether or not dividends from a stock will be paid.
What is the Board of Directors?
200
In order to calm an investor’s fear of new shares diluting the value of their investment, a corporation will offer this. Investors then have the right to buy some of the new shares before they are offered to the public, but only for a short period of time (30-60 days).
What are Preemptive Rights?
200
This is the number of outstanding common shares of a company multiplied by its current price (the value of all the company’s outstanding market shares).
What is Market Capitalization?
300
Stock that a corporation has distributed minus any of the shares it has bought back -this type of stock has voting rights and may receive dividends.
What is Outstanding Stock?
300
These are the common stocks of large, well-established companies that have a long and steady history of profits and dividends as well as a reputation for solid management.
What is a Blue Chip Stock?
300
How & when dividends are taxed.
What is they are taxed in the year in which they are received at ordinary income rate?
300
Two actions an investor might take if they are bullish (believes that the price of a security is going up)?
What is Buy Calls or Sell Puts?
300
A company needs this if it wants to issue additional shares of stock.
What is approval of the majority of it's outstanding shares?
400
This type of voting tends to favor smaller shareholders.
What is Cumulative Voting?
400
Stocks of companies that tend to remain profitable even when the economy is experiencing a recession. They are stocks of companies that provide products and services that are considered staples.
What is Defensive Stocks?
400
In this type of preferred stock, when a corporation chooses to pay less than the full stated dividend, all of the preferred dividends that are unpaid must be paid before common stockholders are paid any dividends.
What is Cumulative Preferred Stock?
400
Two actions an investor might take if they are bearish (believes that the price of a security is going down)?
What is Sell Calls & Buy Puts?
400
The type of security an investor who's primary goal is capital appreciation (as opposed to a bond).
What is Common Stock?
500
This is a measurement used to determine the volatility of an asset as compared to the market.
What is Beta?
500
These stocks have prices that tend to rise and fall along with fluctuations in the general economy. During hard economic times, they may reduce or suspend dividend payments.
What are Cyclical Stocks?
500
When ex-dividend date occurs?
What is two business days prior to the record date?
500
This option is used as a means of increasing the returns, or generating income, on the stock that investors already own.
What is Covered Call Writing?
500
The value of these stocks tend to move in a direction that is opposite of the general economic trend.
What are Counter-Cyclical Stocks?
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