BU111 Lecture 10: Lecture 10 2016-10-19
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BU111 Full Course Notes
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Pre-emptive right purchase more shares at set price. No unless number of dividends unpaid i(cid:374) (cid:858)arrears(cid:859) Yes fixed % - after interest paid on debt but before common dividend. Less volatile (dividends) sensitive to interest rates. Cumulative pay back dividends before issuing more. Participation feature - equally participate in extra money from the dividend pot amongst common and preferred shareholders. Demand and supply of stock due to negative or positive perceptions/facts. Primary factors: earnings above or below expectations, rumours, general market conditions bull vs bear markets, economy, interest (especially preferred) Bear market: supply exceeds demand: speculation bought or sold on belief price will soon move. Price of a security is a collective expression of all opinions of those who are buying and selling. Undervalued issue offers higher return than stocks of similar risk. Risk is lower than what the stock returns. Dividend: if a dividend has been issued by the company.
