MGMT 1P93 Lecture Notes - Lecture 5: Value Investing, Toronto Stock Exchange, Market Timing
8 Oct 2016
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3 major types of securities that are traded in markets are: common stocks, preferred stocks, bonds. Capital gain-if the price of the stock rises above the amount they paid for it. Pre-emptive right- if new stocks are created, existing shareholders get first pick. Right to residual claim on asset- it comes after all the other claims have been satisfied. Stocks that gives its holder preference over common stockholders. Payment of dividends are first given to preferred shareholders. Long-term debt issued by a corporation or government (long-term iou) Most bonds are secured with a pledge of specific assets. Convertible bonds: allow bonds to be transferred into shares of common stock. Serial bonds have unique maturity dates and help spread our repayments. Company may establish sinking fund to assist in repayment. Over the counter (otc) market: high risk, electronic communication networks. Canada"s only exchange for senior stocks: an electronic trading environment and no longer.
