BU111 Lecture Notes - Lecture 6: Cumulate Rock
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Characteristics voting rights (stock holders) (you get to vote who becomes board of. Directors) no fixed term (you don"t have any set days where your stock becomes worth an amount of money. You just have it until you want to sell it, and then sell it at market price. Or, the company delists (bankrupt) and you lose your stock) variable return (you don"t know) discretionary payment (dividends) (a share of profit amongst stock holders. Example: apple) risk (might get a share of profit, might not) Yes but only after interest paid on debt cumulative (missed dividends cumulate) (example: if a company can"t pay dividends this year, they cumulate the total they didn"t pay and pay it another year) paid before common participation feature. Paid after debt holders (debt holders = banks) Less volatile (dividends) sensitive to interest rates (won"t grow as fast because profits go back to shareholders) Paid after preferred (if there"s anything left, stock holders get example vultures)
