Equity Securities and Common Stock

A part-owner of a corporation, possessing an equity position.

To profit from dividends or capital gains.

A share of company profits distributed to shareholders.

Profit from selling shares for a higher price than paid.

The potential for a stock price to increase without limit.

Shareholders are not personally liable for the corporation's debts.

Record of ownership.

Security held in the name of a broker-dealer on behalf of the customer.

Common shareholders are not entitled to receive dividends; dividend payments are at the corporation's discretion.

Common shareholders cannot demand or vote to dissolve the company for asset liquidation.

Common shareholders do not directly vote for officers or senior management; choices are made by the Board of Directors.

Historically, it's the security type with the greatest potential for long-term capital appreciation.

100 shares

Order of asset distribution when a company liquidates.

Having the last claim on assets during liquidation - greatest risk.

Voting in person or via absentee ballot (proxy).

Shareholders get one vote per share for each director.

Most beneficial to large stockholders.

Shareholders get votes = shares * number of directors.

Vote all shares for one candidate, or split them.

Most beneficial to minority stockholders.

The maximum number of shares a corporation can sell, as defined by its charter.

The number of shares sold to the public in a primary distribution; it can be less than or equal to authorized stock.

A company's own shares that it has repurchased from the open market.

Shares held by stockholders; these are the shares that vote and receive dividends.

Issued Stock minus Treasury Stock equals Outstanding Stock.

Stock from well-established, high-quality companies known for consistent dividend payments.

Stock from companies expected to have rapid revenue and earnings growth. Tend to reinvest earnings.

Stock heavily influenced by economic cycles, rising and falling with the economy.

Stock that tends to move in the opposite direction of the economy.

A company with less than $1 billion in annual gross revenues, rapid growth, high risk, and potential

Increases outstanding shares without changing ownership proportion.

To increase the marketability of the stock.

Decreases proportionately to the split.

Decreases outstanding shares, increasing market price per share.

Increases proportionately to the reverse split.

Investor buys and owns a security, expecting its price to increase; associated with being "Bullish."

Investor borrows and sells stock, expecting its price to decrease, and buys it back later to return it; associated with being "Bearish."

The stated value printed on the stock certificate; largely irrelevant for investors.

The current price at which a stock is traded, determined by supply and demand.

In stock trading, a "point" represents a $1 change in price.

The date when a buy or sell order is executed in the market.

For common stock, it's the 2nd business day after the trade date (T+2) when the buyer pays and the seller delivers.

Requires payment for securities within four business days after the trade date (T+4).

Stocks that resist business cycles and general stock market fluctuations. Earnings are generally stable and consistent.

Tobacco, utilities, food, pharmaceutical, and auto-repair companies.

Companies providing essential services like electricity, gas, and water.

Above-average dividend yields, less capital appreciation, and high leverage (debt).

Stocks undervalued that can increase rapidly due to factors like new management or product launches.

Receipts traded in the U.S. representing ownership in foreign stocks held by a U.S. bank.

Paid in U.S. dollars and taxed as a security (Form 1099b).

ADRs do NOT have voting privileges.