Fin 323 - Ch 8

Proxy

A grant of authority by a shareholder allowing another individual to vote his or her shares.

Straight Voting

A procedure in which a shareholder may cast all votes for each member of the board of directors.

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.

Over the Counter (OTC) market

Securities market in which trading is almost exclusively done through dealers who buy and sell for their own inventories.

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.

DMMs post

A fixed place on the exchange floor where the DMM operates.

Dividend Yeild

A stock's expected cash dividend divided by its current price.

Broker

An agent who arranges security transactions among investors.

Dealer

An agent who buys and sells securities from inventory.

Member

As of 2006, a member is the owner of a trading license on the NYSE.

Supplemental Liquidity Providers (SLPs)

Investment firms that are active participants in stocks assigned to them. Their job is to make a one-sided market (i.e., offering to either buy or sell). They trade purely for their own accounts.

Designate Market Makers (DMMs)

NYSE members who act as dealers in particular stocks. Formerly known as "specialists."

Floor Brokers

NYSE members who execute customer buy and sell orders.

Preferred Stock

Stock with dividend priority over common stock, normally with a fixed dividend rate, sometimes without voting rights.

Capital Gains Yield

The dividend growth rate, or the rate at which the value of an investment grows.

Dividend Growth Model

The dividend growth rate, or the rate at which the value of an investment grows.

Inside Quotes

The highest bid quotes and the lowest ask quotes for a security.