MAF307 Lecture Notes - Lecture 11: Put Option, Fundamental Analysis, Corporate Bond
Document Summary
Topic 1: real assets used to produce goods and services, financial assets claims on real assets or the income generated by them. Fixed salary = compensation independent of the firms success, safest compensation with the most value. Shares in firm that must be held = manager earns most when shareholder wealth is maximised, aligns interest of managers with that of shareholders. Salary linked to firms profits = creates incentives for managers to contribute to the firms success. Common stock = represents ownership in a publicly held corporation. Proffered stock = represents ownership in a corporation. Pay a fixed dividend for the life of the stock. Corporate bonds = long term debt issued by corporations, typically paying semi-annual coupons and returning the face value of the bond at (cid:373)aturity. Initial public offering (ipo) = first time a privately owned company sells shares to the general public. Placement = issuance of shares by a company that has already undergone ipo.
