Textbook Notes (381,163)
CA (168,383)
UTSC (19,323)
MGT (1,095)
MGTA02H3 (363)
Chapter 9

chapter 9 notes

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

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Chapter 9
·Securities
: stock or buy/sell bond (represent secured asset based claim on the part of investor)
·Primary securities market
: buy or sell new stock/bond by firm or government
·Investment banker
: financial institution engaged in buy or resell new stock or bond
advise company on timing and financial term for new issue
underwriting or buying new securities, bear some risk
create distribution network (into investor)
·Common share
market value
: current pr ice of the share in secondary security market (real value of a share)
price influence by: companys profit, rumour, investor relation, stockbroker recommendation
book value
: value of common stock express as total OE divided by number of share
success company: market value > book value
investment traits of common share
common share: risky, change value often, sometime no dividend, high growth potential
Blue chip stock
: stocks of well established, financially sound firm
Market capitalization
: market value of stock on stock exchange
·Preferred share
: stated value, dividend, callable
Investment traits of preferred share
:
prefer red share: less risky, cumulative, fixed dividend, not potential growth
cumulative preferred share: dividend not paid in past, must first pay before to common share
·Stock exchange
: organization of individual formed, provide institutional setting, buy or sell stock (non-
profit)
trading floor
: trade only allow at there, any changes may be swiftly reflected in share price
broker
: licensed to buy or sell securities for customer in secondary market, provide other financial service
discount broker
: low cost, not commission
online trading
: low fee, fast, convenient
full service broker:
Canadian stock exchange: Toronto stock exchange
NYSE (New York Stock Exchange), AMEX
over the counter market: organization of securities dealer form to trade stock outside the for mal institutional
setting of the organized stock exchange
NASDAQ: stock market implement by NASD operate by broadcasting trading information on internet
NASD: National Association of Secur ities Dealers (largest private sector securities)
·Bond
: written promise that borrower pay lender principle and interest (IOU), claim before common share
and prefer red share
stock: ownership, bond: indebtedness
·Government bond
: issued by federal government, safest, longer more risky
·Municipal bond
: issued by provincial or local government (use to finance school and transportation) ex:
safe, liquid
·Corporate bond
: issued by company as a source of LT funding, riskier than ST
·Register bond
: names of holder are registered with company
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Description
Chapter 9Securities stock or buysell bond represent secured asset based claim on the part of investorPrimary securities market buy or sell new stockbond by firm or governmentInvestment banker financial institution engaged in buy or resell new stock or bondadvise company on timing and financial term for new issueunderwriting or buying new securities bear some riskcreate distribution network into investorCommon sharemarket value current price of the share in secondary security market real value of a shareprice influence by companys profit rumour investor relation stockbroker recommendation book value value of common stock express as total OE divided by number of share success company market valuebook valueinvestment traits of common share common share risky change value often sometime no dividend high growth potentialBlue chip stock stocks of well established financially sound firmMarket capitalization market value of stock on stock exchangePreferred share stated value dividend callableInvestment traits of preferred share preferred share less risky cumulative fixed dividend not potential growth cumulative preferred share dividend not paid in past must first pay before to common shareStock exchange organization of indi
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