dividend growth model |
a model that determines the current price of a stock as its dividend next period divided by the discounted rate less the dividend growth rate |
dividend yield |
a stock’s expected cash dividend divided by its current price |
capital gains yield |
the dividend growth rate, or the rate at which the value of an investment grows |
cumulative voting |
a procedure in which a shareholder may cast all votes for one member of the board of directors |
common stock |
equity without priority for dividends or in bankruptcy |
straight voting |
a procedure in which a shareholder may cast all votes for each member of the board of directors |
proxy |
a grant of authority by a shareholder allowing another individual to vote that shareholder’s shares. |
dividends |
payments by a corporation to shareholders, made in either cash or stock. |
preferred stock |
stock with dividend priority over common stock, normally with a fixed dividend rate, sometimes without voting rights. |
primary market |
the market in which new securities are originally sold to investors. |
secondary market |
the market in which previously issued securities are traded among investors. |
dealer |
an agent who buys and sells securities from inventory |
broker |
an agent who arranges security transactions among investors |
member |
as of 2006, a member is the owner of a trading license on the NYSE |
commission brokers |
NYSE members who execute customer orders to buy and sell stock transmitted to the exchange floor |
specialist |
an NYSE member acting as a dealer in a small number of securities on the exchange floor; often called a market maker |
floor brokers |
NYSE members who execute orders for commission brokers on a fee basis; sometimes called $2 brokers. |
SuperDOT system |
an electronic NYSE system allowing orders to be transmitted directly to the specialist |
floor traders |
NYSE members who trade for their own accounts, trying to anticipate temporary price fluctuations |
order flow |
the flow of customer orders to buy and sell securities |
specialist’s post |
the fixed place on the exchange floor where the specialist operates |
inside quotes |
the highest bid quotes and the lowest ask quotes for a security |
electronic communications networks (ECNs) |
web sites that allow investors to trade directly with one another |
stock price |
the dividend growth model makes the implicit assumption that the _________ ________ will grow at the same constant rate as the dividend. if cash flows on an investment grow at a constant rate through time, the value of that investment grows at the same rate as the cash flows. |
No. Investors who don’t like the voting features of a particular class of stock are under no obligation to buy it. |
is it unfair or unethical for corporations to create classes of stock with unequal voting rights? |
stock value |
the current_________ ________ reflects the risk, timing, and magnitude of all future cash flows, both short-term and long-term. |