Stock Market Terms

Debt financing: A method of financing in which a company receives a loan and gives its promise to repay the loan but it does not give ownership

Equity financing: the act of raising money for company activities by selling common or preferred stock to individual or institutional investors.

Individual Investor: who purchases small amounts of securities for him/herself, as opposed to an institutional investor.

Institutional Investor: Is a business, they are a lot larger, with a lot more money to invest.

Limited Liability: not completely liable for losses incurred, these refer to the losses a company experiences.

Dividend: A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Common Stock: represent ownership in a company and a claim (dividends) on a portion of profits.

Preferred Stock: represents some degree of ownership in a company but usually doesn't come with the same voting rights.

IPO: Is the initial public offering, or the price a company offers when they first enter the public market.

Market Capitalization: The market value of a company as determined by their share price. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share.

Bid: An offer made by an investor, a trader or a dealer to buy a security. The bid will stipulate both the price at which the buyer is willing to purchase the security and the quantity to be purchased.

Ask: stipulates the price a seller is willing to accept for a security and the quantity of the security to be sold at that price.

Market Index: An aggregate value produced by combining several stocks or other investment vehicles together and expressing their total values against a base value from a specific date.

Bull Market: A financial market of a group of securities in which prices are rising or are expected to rise. Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue.

Bear Market: A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining.

TSX Exchange: Canada’s senior equities market, providing domestic and international investors with access to Canada’s marketplace.

TSX Exhange operations: Issuers list a variety of securities on Toronto Stock Exchange, including conventional securities and equity-related products, including exchange traded funds, income trusts, and investment funds.