BUS 082 Lecture Notes - Lecture 9: Primary Market, Chicago Stock Exchange, Hybrid Security

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Opportunities for funding and investments for firms and individuals. Bonds are a certificate indicating that the company (or govt. ) has borrowed a given sum of money and agrees to repay it with interest. Common stock is the most frequently issued stock, which has voting rights, possibility of dividends, and appreciation ability (value goes up) it is risky because it is the last to be paid. Preferred stock is a hybrid security (part debt, part equity) Preference in distribution of profit- gets a fixed dividend. Safer than common stock, but less opportunity for. Investment bankers are people that match people and institutions with appreciation money to invest with firms that need money. May underwrite your securities the written terms of the agreement is called an indenture there is no transfer of ownership in issuing a bond they are rated in terms of risk. Example: bond has face value of ,000 at a 10% interest rate.

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