4.2.1 Study: Own a Piece of the Pie
Corporation
A business owned by stockholders that is a legal entity with the right to buy, sell, and make contracts
stock
A certificate showing a share of ownership in a corporation
Market Capitalization
A companies outstanding shares multiplied by its share price
Public Company
A company that has offered to stock to the public in an initial public offering
private company
A company who is ownership is held entirely in private hands
board of directors
A group of people elected by the stockholders to run the corporation
crash
A major decline in the price is
Stockholder
A person who owns a share of stock in a corporation, also known as a shareholder
Dividends
A share of a company's profit that the company pays to investors
common stock
A stock that represents ownership in a company; also called "ordinary shares"
bubble
A surge in price is beyond the real value of the associated asset
Capital gain
An increase in the value of an investment that gives it a higher worth than the original purchase price
Securities and exchange commission
And agency of the U.S.government that regulates and oversees the stock market in order to protect investors
share
One unit of ownership in a corporation
stock certificates
Pieces of paper representing ownership shares in a corporation
preferred stock
Stock that represents claim of ownership in a company and has a higher claim on assets and earnings then common stock
return
The amount gained or lost by an investment
risk aversion
The amount of reluctance a person has to taking chances
initial public offering
The first sale of a stock to the public; also called an IPO
secondary market
The market in which investors buy and sell shares from each other
primary market
The market in which investors have the first opportunity to buy a newly issued share
outstanding shares
the total number of shares issued