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Unformatted text preview: 1 Stocks Economics 71a: Spring 2007 Mayo, chapter 10 Lecture notes 4.1 Goals Stock basics Historical stock performance Common Stock Ownership of piece of a Frm Key parts Voting rights (control) Dividends Right to assets Limited liability 1. Voting and Control Voting rights In proportion to share holdings Annual meetings Proxy irm control Shareholders elect Board of Directors Oversee management Sometimes difFcult to remove 2 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 2. Dividends Payments to shareholders from Frm Usually cash Usually paid quarterly irm sets amounts Dividends paid after all other obligations are met Amount can be zero 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 Dividend Decisions ProFts of the Frm (earnings)...
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- Fall '11