1. STOCKS

2. Lesson Objectives Describe corporate stock and what it represents Explain the advantages and disadvantages of taking a company public Display understanding of the factors that can affect stock prices

3. Key Vocabulary Best Efforts Underwriting Common Stock Dividends Initial Public Offering Investment Bank Preferred Stock Primary Market Prospectus Secondary Market Securities and Exchange commission Shareholder Stock Market Supply and Demand Underwriter Underwriting

4. Developing Interest in Stocks Who is Alexander Graham Bell? In 1877, Alexander Graham Bell asked a banker for a loan of money. Bell had been working extremely hard over the past years and had finally invented what he called the telephone. His dream was to manufacture and sell these telephones, but he needed some money to help him get started. He decided to ask for a loan. Unfortunately, the banker was completely unimpressed by Bell’s invention and asked him to remove the telephone from his desk, telling him that there was no way his loan would be approved. Bell felt that there were many investors who would see his invention’s potential, but he wasn’t sure how to reach them. What could he do to raise money to start his telephone-making company?

5. Developing Interest in Stocks Investors started buying shares of stock in Bell’s company, and he was able to raise enough capital to start manufacturing telephones. Amazingly, well over 100 years later, investors can still buy stock in Bell’s company. In fact, AT&T (American Telephone and Telegraph) stock is bought and sold every day!

6. Stocks Download- K-W-L Chart: Stocks What is stock? What is a stock market? Why might a company issue stock? What is the process for selling and buying stock?

7. Terms for Talking about Stocks Download- Reading: The Vocabulary of Stocks Add more information to the W and L sections of the KWL chart

8. Stocks Presentation

9. Going Public Why might a company sell stock to the public? By going public, the company obtains increased prestige and visibility. (True) By going public, the company will improve its financial condition by obtaining money that does not have to be repaid. (True) By going public, the company is required to have its financial statements audited on a regular basis. (True) By going public, control of the company can be taken away from existing management if a group of investors obtains the majority of the control. (True)

10. Why Companies Go Public? Download- Reading: Why Go Public? What are some of the positive and negative effects of a company selling stock to the public?

11. Researching the Pros and Cons of Going Public http://www.nyse.com (click on Overview and go to the Education page) http://www.nyse.com http://www.gaebler.com/Going-Public.htm http://findarticles.com/p/articles/mi_m1154/is_n6_v76/ ai_6448780 http://findarticles.com/p/articles/mi_m1154/is_n6_v76/ ai_6448780 http://www.devicelink.com/mddi/archive/98/10/006.htm l http://www.devicelink.com/mddi/archive/98/10/006.htm l

12. Researching the Pros and Cons of Going Public Download- T-Chart: The Pros and Cons of Going Public Get into groups of 2 Each group will need to have a minimum of five positive and five negative effects recorded on their T-charts.

13. Sharing the Pros and Cons of Going Public There are several advantages (or disadvantages) to raising financing for a company in a stock market. Among the most important are: 1. 2. 3.

14. Sharing the Pros and Cons of Going Public Download- Assignment: Going Public Complete and turn in to the website Without referring back to your summary, describe the IPO process to your neighbor. In what ways were your opinions about using stock to finance a company similar to those of your partner? In what ways were they different?

15. Stock Market We will set up a class room Stock market There are 10 employable positions available in the market and 13 places for reporters to take notes of news and events

16. Stock Market Reflection Which of the three types of investors performed better and why? Did the simulation give an accurate portrayal of life on the trading floor? Why or why not? Of all the roles presented in the simulation, do you see yourself exploring one of these professions as a career choice? Why or why not?