stocks - Stocks Economics 71a: Spring 2007 Mayo, chapter 10...

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Stocks Economics 71a: Spring 2007 Mayo, chapter 10 Lecture notes 4.1
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Goals Stock basics Historical stock performance
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Common Stock Ownership of piece of a firm Key parts Voting rights (control) Dividends Right to assets Limited liability
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1. Voting and Control Voting rights In proportion to share holdings Annual meetings Proxy Firm control Shareholders elect Board of Directors Oversee management Sometimes difficult to remove
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Voting Methods Traditional Everyone votes on each candidate Like regular election Cumulative One vote per board position 5 members - get 5 votes per share Can cast all votes for one candidate Increases power of minority voting blocks Can group all votes for one candidate
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2. Dividends Payments to shareholders from firm Usually cash Usually paid quarterly Firm sets amounts Dividends paid after all other obligations are met Amount can be zero
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Dividend Timing Declaration date (June 3rd) Ex-dividend date (June 16) Date of record (June 18) Payment date (June 30) Key date: Ex-dividend date Purchase before: get dividend Purchase after: no dividend
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Dividend Decisions Profits of the firm (earnings)
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This document was uploaded on 11/04/2011 for the course FIN 412 at North South University.

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stocks - Stocks Economics 71a: Spring 2007 Mayo, chapter 10...

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