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FNCE 322 lesson 16
Finance 322 Keywords
32
Finance
Undergraduate 3
10/22/2013

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Term
Dividend
Definition
A company's distribution of its profits in the form of cash or shares to its shareholders.
Term
Declaration Date
Definition
The date on which the board of directors announcers the size of the dividend, the ex-dividend date, and the payment date.
Term
Ex-dividend Date
Definition
The date on which the stock "goes ex" meaning it begins trading in the secondary market "without dividend".
Term
Proxy
Definition
A legal agreement a shareholder signs to allow someone else to vote for them at the corporations annual meeting.
Term
Stock Split
Definition
Increasing the number of stock shares outstanding by replacing the existing shares of stock with a given number of shares.
Term
Stock Repurchase
Definition
A company repurchasing its own common shares.
Term
Stock Repurchase
Definition
A company repurchasing its own common shares.
Term
Dividend Yield
Definition
The ratio of the annual dividends to the market price of the stock.
Term
Bear Market
Definition
A stock market characterized by falling prices.
Term
Bull Market
Definition
A stock market characterized by rising prices.
Term
Dividend Yield
Definition
The ratio of the annual dividends to the market price of the stock.
Term
Bear Market
Definition
A stock market characterized by falling prices.
Term
Bull Market
Definition
A stock market characterized by rising prices.
Term
Blue-chip Stocks
Definition
CS issued by large, nationally known companies.
Term
Growth Stocks
Definition
CS issued by companies that have exhibited sales abs growth earnings well above their industry average.
Term
Income Stock
Definition
CS issued by mature firms that pay relatively high dividends with little increase in earnings.
Term
Blue-chip Stocks
Definition
CS issued by large, nationally known companies.
Term
Growth Stocks
Definition
CS issued by companies that have exhibited sales abs growth earnings well above their industry average.
Term
Income Stocks
Definition
CS issued by mature firms that pay relatively high dividends with little increase in earnings.
Term
Speculative Stocks
Definition
CS that vary considerably more risk and variability than a typical stock.
Term
cyclical Stocks
Definition
CS issued by companies whose earnings tend to move with the economy.
Term
Defensive Stocks
Definition
CS issued by companies whose earnings tend not to be affected by swing sin the economy an din some cases, actually perform better during downturns.
Term
Large Caps, Mid Caps, and Small Caps
Definition
Classifications of CS that refer to the size of the issuing firm - more specifically to the level of the firm's capitalization/market value.
Term
Technical Analysis
Definition
A method of stock analysis that focuses on supply and demand, using charts and computer programs to identify and project price trends for a stock or for the market as a whole.
Term
Price/earnings Ratio (P/E Ratio)
Definition
Price per share / Earnings per share.
Term
Fundamental Analysis
Definition
Determining the value of a share by focusing on such determinants as future earnings and dividends, expected level of interest rates, and firm's risk.
Term
Discounted Dividends Valuation Model
Definition
Value of CS = Dividends next year / (Required rate of return - Growth rate)
Term
Dollar Cost Averaging
Definition
A strategy for purchasing CS in which the investor purchases a fixed dollar amount of stock at specified intervals.
Term
Buy and Hold
Definition
An investment strategy that involves buying stock and holding it for a period of years. It has 4 main advantages: 1) it aims at avoiding 'timing the market', 2) it minimizes brokerage fees, 3) holding postpones any capital gains taxes, and 4) your gains will be taxed as long-term capital gains.
Term
Dividend Reinvestment Plan (DRIP)
Definition
An investment plan that allows the investor to automatically reinvest stock dividends in the same company's stock without paying a brokerage fee.
Term
Beta
Definition
The measurement of systematic risk. It is a measure of how responsive a stock portfolio is to changes in the market portfolio. The market beta is 1.0. An above-average systematic risk stock will have a beta greater than 1.0. A below-average systematic risk stock will have a beta with less than 1.0.
Term
Levarage
Definition
Using borrowed funds to increase your purchasing power.
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