BU111 Lecture 5: BU111- Economic Factors
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Economic factors: investment instruments: represents equity/capital for issuing company, stocks -> equity side of financing. Governments don"t sell ownership of the company: company of the government might"ve issued a bond, raising money with equity -> you have to change the organization of how the company is run, characteristics, voting rights. In some types of stocks, shareholders are given voting rights (partial voice) Vote for who sits on your board of directors: no fixed term. Can own a stock indefinitely, no expiry. There"s no end date, don"t know when the stock will mature: variable return. Don"t know what your return will be, what the stock will be worth when you want to sell it. You might get some compensation for your ownership but you also might not: discretionary payment (dividends) Management team decides if they will pay a dividend at the end of the year, its up to their discretion, however, bond payments are required.