Equity Securities

Common Stock & Shares of Corporate Ownership

•Common Stocks represent shares of ownership in a corporation.
•Common stock is also known as equities and equity securities.
• Each share represents a portion of ownership in the company and a vote on corporate governance matters.
•Common stock is issued by corporations to raise money.
•When a corporation issues stock for the first time it is known as an “initial public offering” (IPO).
•Market value of common stock is based on the expected future earnings of the company.
•Common stock that is not publicly traded is referred to as “closely held” and the owners are usually directly involved in the company’s management.

Corporations Board of Directors & Management

•Corporations are controlled by a Board of Directors.
•The operations of the corporation are run by managers who are selected by the Board of Directors.
•The Board of Directors oversees the performance of the managers.
•Publicly traded companies are required to hold an annual meeting at with the Board of Directors are elected.
•Members who are not able to attend the annual meeting can vote via Proxy. The proxy gives another shareholder the power to vote on their behalf or as the shareholder directs them to vote.


Stock Market Listings




Preferred Stock

•Preferred stock are nonvoting shares of stock that, like bonds, usually receive a steady stream of dividend payments each year.
•Preferred stock is also similar to bonds as it does not give the shareholder voting power on issues voted on by owners.
•Dividends of preferred stock are cumulative. Unpaid dividends build-up over time and must be paid in full before any dividends can be paid on common stock.
•Dividends are not tax deductible.
•Preferred stock can be callable meaning that the issuing firm can buy them back from the stockholder to avoid making any further dividend payments. 



Última modificación: martes, 14 de agosto de 2018, 08:37