Textbook Notes (378,588)
CA (167,186)
UTSC (19,212)
MGT (1,095)
MGTA02H3 (363)
Chapter 9

Chapter 9 Notes

4 Pages
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Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird

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Securities Market
Securities: Stock and bonds (which represent a secured-asset-based claim on the part of in-
vestors) that can be bought and sold
Primary Securities Market: The sale and purchase of newly issued stocks and bonds by firms
or government
To bring new security to market, the issuing corporation must obtain approval from a provin-
cial securities commission and services from investment banker.
Investment Banker: Any financial institution engaged in purchasing and reselling new stocks
and bonds
A. Advise the company on the timing and financial terms for the new issue
B. By underwriting (buying) the new securities, investment bankers bear some of the
risk of issuing the new security
C. Create the distribution network that moves the new securities through banks to people
Secondary Security Market: The sale and purchase of previously issued stocks and bonds
Stock
Common Shares
Market Value: The current price of one share of a stock in the secondary securities market -
the real value of the share
Reflects the buyers willingness to invest in a company
Book Value: Value of a common stock expressed as total owners’ equity divided by the num-
ber of shares of stock
Common shares are among the riskiest of all securities.
Blue-chip Stocks: Stocks of well-established, financially sound firms
Market Capitalization: The dollar value of stocks listed on a stock exchange
April 24, 2011 4:24 PM
Ch9: Understanding Securities and Investments
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Description
April 24, 2011 4:24 PM Ch9: Understanding Securities and Investments SecuritiesMarket Securities: Stock and bonds (which represent a secured-asset-based claim on the part of in- vestors) that can be bought and sold Primary Securities Market: The sale and purchase of newly issued stocks and bonds by firms or government To bring new security to market, the issuing corporation must obtain approval from a provin- cial securities commission and services from investment banker. Investment Banker:Any financial institution engaged in purchasing and reselling new stocks and bonds A. Advise the company on the timing and financial terms for the new issue B. By underwriting (buying) the new securities, investment bankers bear some of the risk of issuing the new security C. Create the distribution network that moves the new securities through banks to people Secondary Security Market: The sale and purchase of previously issued stocks and bonds Stock Common Shares Market Value: The current price of one share of a stock in the secondary securities market - the real value of the share Reflects the buyers willingness to invest in a company Book Value: Value of a common stock expressed as total ownersequity divided by the num- ber of shares of stock Common shares are among the riskiest of all securities. Blue-chip Stocks: Stocks of well-established, financially sound firms Market Capitalization: The dollar value of stocks listed on a stock exchange www.notesolution.com
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