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FIN 380
Exam #2
42
Finance
Undergraduate 4
11/06/2013

Additional Finance Flashcards

 


 

Cards

Term
Residual Owners
Definition
Stockholders are entitled to dividend income + prorated share of the firms earnings after all other obligations have been met
Term
Equity Capital
Definition
evidence of ownership position in a firm, in the form of shares of common stock. This is why stocks are sometimes called equities
Term
Publicly Traded Issues
Definition
shares of stock that readily available to the general market and are bought and sold in the open market.
Term
Public Offering
Definition
an offering to sell to the investing public a set number of shares of a firm's stock at a specified price
Term
Rights Offering
Definition
an offering of a new issue of stock to existing stockholders, who may purchase new shares in proportion to their current ownership
Term
Stock Spin-off
Definition
conversion of one of a firm's subsidiaries to a stand-alone company by distribution of stock in the new company to existing shareholders
Term
Stock Split
Definition
when a company increases the number of shares outstanding by exchanging a specified number of new shares of stock for each outstanding share. 2-1 Start with 200 shares @ $100 end up with 400 shares at $50
Term
Treasury Stock
Definition
Shares of stock that were originally sold by the company and have been repurchased by the company
Term
Classified Common Stock
Definition
common stock issued in different classes each of which offers different privileges and benefits to its holders Different shares may have different voting rights
Term
Round-Lot
Definition
buying shares of stock or multiples of 100 shares
Term
Odd-Lot
Definition
buying less than 100 shares of stock
Term
Par Value
Definition
states or face value of a stock
Term
Book Value
Definition
amount of common stockholders equity
Term
Market value
Definition
current price of the stock in stock market
Term
Market Capitalization
Definition
overall current value of company in stock market
Term
Investment Value
Definition
amount investors believe stock should be trading for, or what they think it's worth
Term
Declaration date
Definition
Board announces dividend will be paid and states ex-dividend date, date of record + payment date
Term
Ex-Dividend Date
Definition
If buy stock on/ after this date will not receive dividend
Term
Date of Record
Definition
If not registered shareholder by this date, will not get dividend
Term
Payment Date
Definition
when dividend checks mailed to shareholders
Term
Blue Chip Stocks
Definition
financially strong, high quality stocks with long and stable records of earnings and dividends
Term
Buy and Hold
Definition
Stock investment strategy where investors buy high-quality stocks and hold them for extended time periods
Term
Aggressive Stock Management
Definition
Investors buy high-quality growth stocks, blue chip stocks, mid-cap stocks, tech stocks and cyclical
Term
Security Analysis
Definition
process of gathering and organizing information and then using it to determine the intrinsic value of a share of common stock
Term
Intrinsic Value
Definition
underlying or inherent value of a stock as determined through fundamental analysis
Term
Top Down Anaylsis
Definition
1) Economic Analysis 2)Industry Analysis 3) Fundamental Analysis
Term
Efficient Market
Definition
concept that the market is so efficient in processing new information that securities trade very close to or at their correct values at all times
Term
Economic Analysis
Definition
study of general economic conditions used in common stock valuation
Term
Gross Domestic Product
Definition
market value of all goods and services produced in a country in a year
Term
Industrial Production
Definition
measure of activity/output in industrial or productive segment of economy
Term
The Balance Sheet
Definition
summary of company's financial position at a point in time
Term
The Income Statement
Definition
summary of company's profitability over a specific period of time
Term
The Statement of Cash Flows
Definition
summary of a company's cash flows and other events that led to changes in company's cash position
Term
Current Ratio
Definition
how many dollars of short term assets are available for every dollar of short term liabilities
Term
New Working Capital
Definition
how many dollars of working capital are available to pay bills and grow the business
Term
Required Rate of Return
Definition
return necessary to compensate an investor for the risk involved in an investment
Term
Random Walk
Definition
the theory that stock price movements are unpredictable, so there is no way to know where prices are headed
Term
Interest Rate Risk
Definition
is the chance that changes in interest rates will affect the bonds value
Term
Purchasing Power Risk
Definition
is the chance that bond yields will lag behind inflation rates
Term
Business/Financial Risk
Definition
is the chance the issuer of the bond will default on interest and or principal payments
Term
Liquidity Risk
Definition
is the risk that a bond will be difficult to sell at a reasonable price
Term
Call risk
Definition
is the risk that a bond will be called before its scheduled maturity date
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