BU111 Lecture Notes - Lecture 5: Hypothecation, Interest Expense, Geostationary Operational Environmental Satellite

• School: WLU
• Department: Business
• Course: BU111
• Professor: Sofy Carayannopoulos

Document Summary

Characteristics: voting, no fixed term, variable return, discretionary payments (dividends, risk. Pre-emptive right- purchase more shares at set price. Common: highest risk, get nothing upon bankruptcy, gain the most from, pre-emotive right, ability to purchase shares to maintain equity control. Preferred: give up rights to vote for a dividend, but are still considered owners, dividends are promised, percentage of par value, discretionary payments, redemption, purchase back in order to avoid dividend payments, cumulative, dividends unpaid will stack, participation. If dividend pot is ample enough to give shares to common share holders which are bigger than preferred, max value of share dividend is set. If money is still left over, equal participation occurs. What impacts stock price: demand and supply of stock due to perceptions and facts, primary factors, earnings (above or below expectations, rumors, general market conditions (bull vs bear markets, economy, interest, bull = demand>supply, bear = supply>demand.