Flower Bond: Fixed income products that were originally purchased by investors at a discount
for the purpose of paying federal estate taxes upon their maturity.
Investors would purchase these bonds before their death in
anticipation of federal estate taxe
An investment bank advises a company on how to raise capital for a company once a company
decides to raise the money. The bank will then offer a proposal as to the pricing of the stock and if
chosen, will underwrite the stock and th
Types of Orders
1. Day Order- A limit order that is pushed during the day until MKT closing.
2. GTC- An order at a set price that is active until investor says so.
3. Market- When you buy certain # of shares at MKT Value (takes 9-10 secs)
When a company incorporates (in the US), a privilege is given to create limited liability. Once
youve incorporated, any liabilities that the company have can only be satisfied by the company
assets - NOT by personal assets.
Bonds: A debt investment in which an investor loans money to an entity (corporate or
governmental) that borrows the funds for a defined period of time at a fixed interest rate.
Indenture: A legal / binding contract between the bond issuer and bondho
Preferred Stock: A class of ownership in a corporation that has a higher claim on the assets and
earnings than common stock. Preferred stock generally has a dividend that must be paid out
before dividends to common stockholders and the sha
Dividend - A distribution of a portion of a company's earnings, decided by the board of directors,
to a class of its shareholders.
Dividends can be issued either as CASH or STOCK
Company management usually sets forth a policy in t
The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It
is a trade that profits by exploiting price differences of identical or similar financial instruments,
on different markets or in different form
Majority vs Cumulative Voting
If you own or control 50% of the shares outstanding + 1 share = majority
If it is based on majority, you control the entire board
Even minority member may get representation on the board
Benefits the minor
Types of Markets
1. Primary MKT- IPO through an IB. Initial sale of Secs.
2. Secondary MKT- Exchange/ OTC. Already outstanding shares that are on the mkt. Physical
exchange / Electronic (NASDAQ)
3. 3rd MKT- Where agent is middle man bet
'Ginnie Mae - Government National Mortgage Association - GNMA'
A U.S. government corporation within the U.S. Department of Housing and Urban Development
(HUD). Ginnie May aims to:
1. Ensure liquidity for government-insured
. A type of security specifically designed to mirror the performance of a larger index.
THE ACCOUNTING EQUATION
Retained Earnings - The percentage of net earnings not paid out as dividends, but retained by
the company to be reinvested in its core b