Chapter 7 Flashcards Preview

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Flashcards in Chapter 7 Deck (23):
1

Dividend Growth Rate

Model that determines current price of a stock as its dividend next period divided by the discounted rate less the dividend growth rate

2

Dividend Yield

Stock's expected cash dividend / current price

3

Capital Gains Yield

Dividend growth rate

4

Common Stock

Equity without priority for dividends or in bankruptcy

5

Cumulative Voting

Procedure in which a shareholder may cast all votes for one member of the board of directors

6

Straight Voting

Procedure in which a shareholder may cast all votes for each member of the board of directors

7

Proxy

Grant of authority by a shareholder allowing another individual to vote that shareholder's shares

8

Dividends

Payments by a corporation to shareholders, made in either cash or stock

9

Preferred Stock

Stock with dividend priority over common stock, normally with a fixed dividend rate, sometimes without voting rights

10

Primary Market

Market in which new securities are originally sold to investors

11

Secondary Market

Market in which previously issued securities are traded among investors

12

Dealer

Agent who buys and sells securities from inventory

13

Broker

Agent who arranges security transactions among investors

14

Member

Owner of a trading license on the NYSE

15

Commission Brokers

NYSE members who execute customer orders to buy and sell stock transmitted to the exchange floor

16

Specialist

NYSE Member acting as a dealer in a small number of securities on the exchange floor; often called a market maker

17

Floor Brokers

NYSE Members who execute orders for commission brokers on a fee basis; sometimes called $2 brokers

18

SuperDOT System

Electronic NYSE system allowing orders to be transmitted directly to specialist

19

Floor Traders

NYSE Member who trade for their own accounts, trying to anticipate temporary price fluctuations

20

Order Flow

Flow of customer orders to buy and sell securities

21

Specialist's Post

Fixed place on the exchange floor where the specialist operates

22

Inside Quotes

Highest bid quotes and the lowest ask quotes for a security

23

Electronic Communications Network (ECNs)

Web sites that allow investors to trade directly with one another