|Direct stock-purchase programs
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Definition of Direct stock-purchase programs
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
A merger or consolidation in which an acquirer purchases the acquiree's stock.
Publicly traded issues that may be collateralized by mortgages and MBSs.
The second-largest stock exchange in the United States. It trades
Floating rate preferred stock, the dividend on which is adjusted every
Gives the lessee the option to purchase the asset at a price below fair market
The beta of a stock is determined as follows:
A transaction in which the purchaser's intention is to reduce or eliminate a short position in
These are securities that represent equity ownership in a company. Common shares let an
Value of outstanding common shares at par, plus accumulated retained
A convertible security that is traded like an equity issue because the optioned
The market for trading equities, not including preferred stock.
Ratios that are designed to measure the relative claims of stockholders to earnings
These two groups may have interests in a corporation that
Convertible preferred stock that may be exchanged, at the
Preferred stock that can be converted into common stock at the option of the holder.
Cumulative preferred stock
Preferred stock whose dividends accrue, should the issuer not make timely
Direct estimate method
A method of cash budgeting based on detailed estimates of cash receipts and cash
Lease in which the lessor purchases new equipment from the manufacturer and leases it to the
Commercial paper sold directly by the issuer to investors.
Selling a new issue not by offering it for sale publicly, but by placing it with one of several
For foreign exchange, the number of U.S. dollars needed to buy one unit of a foreign currency.
Direct search market
Buyers and sellers seek each other directly and transact directly.
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
Exchange of stock
Acquisition of another company by purchase of its stock in exchange for cash or shares.
Foreign direct investment (FDI)
The acquisition abroad of physical assets such as plant and equipment, with
Common stock of a company that has an opportunity to invest money and earn more than the
Common stock with a high dividend yield and few profitable investment opportunities.
For foreign exchange, the number of units of a foreign currency needed to buy one U.S.$.
Privately placed common stock, so-called because the SEC requires a letter from the purchaser
stocks that are traded on an exchange.
stocks that are traded on an exchange.
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
For mutual funds, the amount required to open a new account (Minimum Initial
Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and
New York Stock Exchange (NYSE)
Also known as the Big Board or The Exhange. More than 2,00 common
Non-cumulative preferred stock
Preferred stock whose holders must forgo dividend payments when the
Open-market purchase operation
A systematic program of repurchasing shares of stock in market
A transaction in which the purchaser's intention is to create or increase a long position in
Philadelphia Stock Exchange (PHLX)
A securities exchange where American and European foreign
Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a
A security that ranks junior to preferred stock but senior to common stock in the right to
A security that shows ownership in a corporation and gives the holder a claim, prior to the
Preferred stock agreement
A contract for preferred stock.
To buy, to be long, to have an ownership position.
Method of accounting for a merger in which the acquirer is treated as having purchased
As used in connection with project financing, an agreement to purchase a specific
Purchase and sale
A method of securities distribution in which the securities firm purchases the securities
Resembles a sinking fund except that money is used only to purchase bonds if they are selling
Accounting for an acquisition using market value for the consolidation of the two entities'
An agreement with a commitment by the seller (dealer) to buy a security back from
Repurchase of stock
Device to pay cash to firm's shareholders that provides more preferable tax treatment
Reverse stock split
A proportionate decrease in the number of shares, but not the value of shares of stock
Program by which a corporation buys back its own shares in the open market. It is usually
Ownership of a corporation which is represented by shares which represent a piece of the corporation's
Payment of a corporate dividend in the form of stock rather than cash. The stock dividend
Formal organizations, approved and regulated by the Securities and Exchange Commission
A firm's repurchase of outstanding shares of its common stock.
An active portfolio management technique that focuses on advantageous selection of
Balance sheet item that includes the book value of ownership in the corporation. It
Stock index option
An option in which the underlying is a common stock index.
Also called the equity market, the market for trading equities.
An option in which the underlying is the common stock of a corporation.
Stock replacement strategy
A strategy for enhancing a portfolio's return, employed when the futures
Occurs when a firm issues new shares of stock but in turn lowers the current market price of its
This is a lettered symbol assigned to securities and mutual funds that trade on U.S.financial exchanges.
Holder of equity shares in a firm.
Set of books kept by firm management for its annual report that follows Financial
The residual claims that stockholders have against a firm's assets, calculated by
Running out of inventory.
Under Ginnie Mae, mortgage funds provided at below-market rates to residential
The firm buys back its own stock from a potential bidder, usually at a substantial
Common stock that has been repurchased by the company and held in the company's treasury.
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a companyâ€™s assets were sold on the balance sheetâ€™s date. Book value equals:
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
RATE OF RETURN ON STOCKHOLDERSâ€™ EQUITY
The percentage return or profit that management made on each dollar stockholders invested in a company. Hereâ€™s how you figure it:
RATIO OF DEBT TO STOCKHOLDERSâ€™ EQUITY
A ratio that shows which groupâ€”creditors or stockholdersâ€”has the biggest stake in or the most control of a company:
Certificates that signify ownership in a corporation. A share of stock represents a claim on a portion of the companyâ€™s assets.
STOCKHOLDERSâ€™ (OR OWNERSâ€™) EQUITY
The value of the ownersâ€™ interests in a company.
Costs that are readily traceable to particular products or services.
Costs that are necessary to produce a product/service but are not readily traceable to particular products or services â€“ see overhead.
Shares of ownership sold to the public.
A method of preparing the operating section of the Statement of Cash Flows that uses the companyâ€™s actual cash inflows and cash outflows.
Direct write-off method
A method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers.
A method of preparing the operating section of the Statement of Cash Flows that does not use the companyâ€™s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities.
No par value stock
stock issued by the company that does not have an arbitrary value (par value) assigned to it.
A contra account that reduces purchases by the amount of the discounts taken for early payment.
A contra account that reduces purchases by the amount of items purchased that were subsequently returned.
Items purchased by the company for the purpose of resale.
A journal used to record the transactions that result in a credit to accounts payable.
Stated value stock
stock issued by the company that does not have a par value, but does have a stated value. For accounting purposes, stated value is functionally equivalent to par value.
The total amount of contributed capital and retained earnings; synonymous with shareholdersâ€™ equity.
Shares that were sold to the public but have since been repurchased by the company in the open market. Treasury stock is deducted from the equity section, and is therefore a contraequity account.
Ownership shares issued by a business corporation. A business
stockholders' equity, statement of changes in
Although often considered
A financial security that represents an ownership claim on the
Cost of Common Stock
The rate of return required by the investors in the common stock of
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