corporate finance chapter 7 – Flashcards

a model that determines the current price of a stock as its dividend next period divided by the discounted rate less the dividend growth rate

a stock's expected cash dividend divided by its current price

the dividend growth rate, or the rate at which the value of an investment grows

a procedure in which a shareholder may cast all votes for one member of the board of directors

equity without priority for dividends or in bankruptcy

a procedure in which a shareholder may cast all votes for each member of the board of directors

a grant of authority by a shareholder allowing another individual to vote that shareholder's shares.

payments by a corporation to shareholders, made in either cash or stock.

stock with dividend priority over common stock, normally with a fixed dividend rate, sometimes without voting rights.

the market in which new securities are originally sold to investors.

the market in which previously issued securities are traded among investors.

an agent who buys and sells securities from inventory

an agent who arranges security transactions among investors

as of 2006, a member is the owner of a trading license on the NYSE

NYSE members who execute customer orders to buy and sell stock transmitted to the exchange floor

an NYSE member acting as a dealer in a small number of securities on the exchange floor; often called a market maker

NYSE members who execute orders for commission brokers on a fee basis; sometimes called $2 brokers.

an electronic NYSE system allowing orders to be transmitted directly to the specialist

NYSE members who trade for their own accounts, trying to anticipate temporary price fluctuations

the flow of customer orders to buy and sell securities

the fixed place on the exchange floor where the specialist operates

the highest bid quotes and the lowest ask quotes for a security

web sites that allow investors to trade directly with one another

the dividend growth model makes the implicit assumption that the _________ ________ will grow at the same constant rate as the dividend. if cash flows on an investment grow at a constant rate through time, the value of that investment grows at the same rate as the cash flows.

is it unfair or unethical for corporations to create classes of stock with unequal voting rights?

the current_________ ________ reflects the risk, timing, and magnitude of all future cash flows, both short-term and long-term.