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Flashcards in Equity securities Deck (24)
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0

Well Known Seasoned Issuer

1

1

Final Prospectus

-Due 25 days after effective Date
-OTC not on NASDAQ
-90 days if corporation hasn't previously issued stock to the public
-40 Days if stock has been previously listed

2

Preferred Stock Optional Features
Cumulative

-Cumulative - max dividend stock will pay
-will received dividends that would have been paid in the past when a dividend is declared

3

Preferred Stock Optional Features
Adjustable

-Adjustable - changes based on a benchmark security such as a T-bill
-because the dividend adjust or "floats", the stock price stays stable

4

Preferred Stock Optional Features
Convertible

-Convertible - dividend and bankruptcy protection with potential price appreciation of common stock
-issues a lower stated dividend
-conversion price and conversion ration determined at stocks issuance
-

5

Preferred Stock optional features
callable

-buyer paid par or specified premium over par

6

Preferred Stock optional features
Participating

-allows preferred to participate with common shares in earnings of exceptional year

7

Preferred Stock - (Straight/Basic)

-Created to yield a fixed stated return comparable to bonds
-Paid before common stock
-expressed as a % of par value (typically $100)
-

8

Warrants

-long term devices
-issued with an exercise price above market

9

Settlement Date -

Corporate Securities:
-regular way: normally 3 days after trade date
-cash settlement: trade and settlement same date

10

Rights of common stockholders

-vote
-transfer ownership
-received dividends once declared
-inspect corporations books
-preemptive rights
-junior claims in event of liquidation

11

What's on a Stock Certificate?

-issuing corporation
-registered owner
-registrar
-transfer agent
-# of shares
-authorized signature of corporate officer

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Transfer Agent

one who changes buyer and seller name on stock cert

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Registrar

oversees transfer agent to make sure number of shares equal outstanding shares

14

Stock Dividends

stock is given instead of cash

15

Statutory and cumulative voting

-statutory - can vote # of shares per director

-cumulative - can for # of shares * number of directors and then cast any number of votes to a director

16

Issues Stockholder votes on

-election of directors
-Decision about changes in the operations of the company
-stock splits
-issuance of additional securities.

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Splits

-stock distribution of more than 25% of outstanding stock

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D E R P

1. Declaration date - board declares it and it becomes a current liability
2. Ex dividend date - SRO sets, stock purchaser on this date is not going to receive dividends
3. Record Date - corp consults books to see who is on record to get dividend
4. Payable Date - Dividend is Distributed

19

Right to inspect books

Shareholders have the right to regularly review the books
-10q - quarterly
-10k - annualy

20

Preemptive rights

-stockholders right to maintain the same % of ownership when new shares are issued by first right to purchase more shares
-subscription price - price can purchase at - lower than POP
-rights are usually 30-60 days after new shares are issued
-can sell the rights

21

ADR

American Depository Receipts
-issued by US commercial bank
-allows American investor to purchase shares of a foreign company on an american exchange
-has currency risk

22

Bankruptcy Priority

1. Employee Back Wages
2. IRS - taxes Due
3. Mortgage and lien holders
4. Secured bond holders
5. UnSecured bond holders (debentures) & general creditors
6. Subordinated debentures
7. Preferred Stockholders
8. Common Stockholders

23

Types of Shares

Authorized - total number
Issued - portion sold to investor
Unissued - not sold yet
Treasury Stock - Issued stock bought back
Outstanding Stock - number of shares in hands of investors at anytime "Issued - Treasury"