finance 12

limited liability

prevents a persons assets from being used to pay off a companies debt or liabilities of a business

ex dividend date

the date you need to buy a stock to receive pay from it

claims on assets

legal claim a stockholder has on assets in a comp

voting rights

stockholders right to vote in company they have stocks in

book value

value of a stock with context of the company records

earnings per share (EPS)

companies profitability

dividend yeild

how much a company pays in dividends each year

market to book ratio

comparison to market value to company’s book ratio

classification of stocks

blue-chip

speculative

growth

blue chip

common large company stocks usually national known

growth stocks

companies that show growth way above their average

income stocks

stocks with high dividends but little increase earnings

speculative stocks

risky stocks

cyclical stocks

stocks that fluctuate with the economy

stock market index

measure of performance of a stock group that represents a sector of a market

bear market

market with falling prices

bull market

market with rising prices

p/e earnings ratio

how much investors are willing to pay for a dollar of the comps earnings

• higher firm earnings = higher P/E

• higher investor’s rate of return = lower P/E ratio

dollar cost averaging

systematic investment into a stock, continuous payment

lump sum investing

big payment investment at one time rather than small ones spread out