1. Stock Basics
Ms. Zucchero

2. Stock Basics Debt vs. Equity Bond vs. Stock Bond Stock
Guaranteed return of your money
Assume the risk of the company not being successful
Principal + Interest Payments
Dividend

3. Stock Basics Risk There are no guarantees when it comes to stocks
No obligation to pay dividends
Return of 10 to 12 %

4. Stock Basics Common Stock - majority of stock is issued in this form
Represent ownership in a company
Claim on a portion of profits
Get one vote per share to elect the board members
Yields high returns - because entails the most risk
Company goes into bankruptcy - Shareholders are not until all debt is
Preferred Stock
Doesn’t come with the same voting rights
Fixed dividend forever
Company goes into bankruptcy - Shareholders are paid before creditors
Callable

5. Stock Basics Most stocks are traded on exchanges
Some exchanges have a physical location - trading floor
The purpose of the stock market is to facilitate the exchange of securities
Primary Market - IPO - Initial Public Offering
Secondary Market - Investors trade previously-issued securities w/o the involvement of the company

6. Stock Basics
Exchanges vs. Nasdaq