BU283 Final: Final Exam Study Guide
Document Summary
Personal dividend decision: determines whether a company should pay cash out to shareholders through dividends or stock repurchases. Dividend discussion: determining whether or not to return money to shareholders or invest in growth opportunities. Preferred dividends have a higher payment priority than do common dividends. Dividends may have tax benefits, but are never tax deductible. Investment banks help companies raise money from investors by selling their stocks and bonds. Financial system: transfers money form supplies (individual househols) to users (companies) t(cid:396)a(cid:374)sfe(cid:396) f(cid:396)o(cid:373) those (cid:449)ho ha(cid:448)e a su(cid:396)plus to those (cid:449)ho do(cid:374)(cid:859)t. Financial markets: where suppliers and users of capital interact (through intermediaries ex. Multitude of scurities: shares and bonds, but span boarders. Money market: for securities that mature in less than 1 year from issue date , maximum maturity of securities that trade on the money markets is 1 year.
