Finance Chapter 8
Common stock
Equity without priority for dividends or in bankruptcy.
Preferred Stock
Stock with dividend priority over common stock, normally with a fixed dividend rate, sometimes without voting rights.
Proxy
A grant of authority by a shareholder allowing another individual to vote his or her shares.
Dividend Growth Model
A model that determines the current price of a stock as its dividend next period divided by the discount rate less the dividend growth rate.
Straight Voting
A procedure in which a shareholder may bast all votes for each member of the board of directors.
Cumulative Voting
A procedure in which a shareholder may bast all votes for one member of the board of directors.
Dividend Yield
A stock's expected cash dividend divided by its current price.
Dividends
Payments by a corporation to shareholders, made in either cash or stock.
Capital gains yield
The dividend growth rate, or the rate at which the value of an investment grows.
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.