Securities Industry

Question of the Day ?

Primary Markets Investment Banker Initial Public Offering (IPO)

Secondary Market Common Stocks Bonds Preferred Stocks

Common Stocks 1) Owner of Company. 2) Has voting rights.

Common Stock (Continued) 3) Share in the company profits through dividends. 4) Has more potential price appreciation than preferred stock.

Common Stock (Continued) 5) Last claim on assets in the event of liquidation. 6) Highest risk factor.

Bonds (IOU) 1) First claim on earnings and assets. 2) Rank ahead of preferred or common stock in corporations capital structure.

Bonds (Continued) 3) Fixed obligation requiring: A) Payment of stated principal at maturity. B) A series of interest payments at a fixed rate.

Preferred Stocks 1) Receives a fixed dividend from profits. 2) Has claim to common stockholders against assets in the event of company liquidation.

Preferred Stocks (Continued) 3) Has less price appreciation than common stocks. 4) No voting rights with some exceptions.

Closure Venn Diagram. Riskiness Ranking.