Common and preferred stock, corporate and government bonds, yield calculations and ratings.
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- What does ownership of common stock represent?
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Ownership of a share of equity in a corporation- What voting rights do common shareholders typically have?
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The right to vote on matters affecting the company, such as board elections and major corporate decisions- How are common stock dividends typically characterized?
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Variable, discretionary, and paid only after preferred dividend obligations are met- What is the residual claim in a corporation?
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The right of common shareholders to any remaining assets after all creditors and preferred shareholders are paid- In a liquidation, what is the priority order of claims?
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Creditors first, then preferred shareholders, then common shareholders last- What is a cumulative preferred dividend?
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A preferred dividend that accrues and must be paid before common dividends, even if skipped in prior periods- What is a non-cumulative preferred dividend?
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A preferred dividend that does not accrue if unpaid in a given period and does not need to be paid later- What is a convertible preferred stock?
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Preferred stock that gives the holder the option to convert into a set number of common shares- What is a callable preferred stock?
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Preferred stock that can be redeemed by the issuer at a specified price and time- What does par value mean for a bond?
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The face value of the bond that is repaid at maturity, typically $1000 per bond- What is the coupon rate on a bond?
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The fixed annual interest rate paid on the par value, stated as a percentage- What is a debenture?
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An unsecured bond backed only by the creditworthiness of the issuer, not by any pledge of assets- What is an indenture?
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The legal contract between a bond issuer and bondholders that outlines the terms and conditions of the bond- What is the difference between a secured bond and an unsecured bond?
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A secured bond is backed by specific assets as collateral; an unsecured bond is not- What is subordinated debt?
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Debt that has a lower priority claim than senior debt in the event of default or liquidation
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