in10 - Chapter 14: Investing in Stocks and Bonds Objectives...

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Unformatted text preview: Chapter 14: Investing in Stocks and Bonds Objectives Describe stocks and bonds and how they are used by corporations and investors. Define everyday terms in the language of stock investing. Classify stock according to their basic descriptive categories. Objectives Describe the major characteristics of bonds. Differentiate among the four general types of bonds. Objectives Describe what the investor should consider before investing in bonds, particularly the current yield and yield to maturity. List the advantages and disadvantages of investing in bonds. Common stock Preferred stock Bonds Stocks and Bonds and How They are Used Why do corporations issue common stock? To raise money to start or expand a business To help pay for ongoing business expenses They don’t have to repay the money Dividends are not mandatory Stockholders have voting rights Investing in Stocks Why Do Investors Purchase Stock? Income from dividends Dollar appreciation of stock value Increased value from stock splits Common vs. Preferred Stock Common stock get dividends depending on profit the company makes Preferred stock receive cash dividends before common stock holders pre-determined dividend rate most preferred stock is callable Features of Preferred Stock Cumulative preferred stock...
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This note was uploaded on 02/11/2011 for the course FIN 3403 taught by Professor Tapley during the Spring '06 term at University of Florida.

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in10 - Chapter 14: Investing in Stocks and Bonds Objectives...

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