Presentation on theme: "Chapter Nine The Capital Markets Slide 9–3 Capital Markets Original maturity is greater than one year Best known capital market securities: –Stocks and."— Presentation transcript:
Slide 9–3 Capital Markets Original maturity is greater than one year Best known capital market securities: –Stocks and bonds Primary issuers of securities: –Federal and local governments –Corporations Largest purchasers of securities: –You and me
Slide 9–4 Capital Market Trading 1.Primary market for initial sale (IPO) 2.Secondary market –Over-the-counter –Organized exchanges (i.e., NYSE)
Slide 9–5 Want to be listed on the NYSE? You will need at least: 1.2000 stockholders, each owning at least 100 shares 2.A minimum of 1.1 million shares traded publicly 3.Pretax earnings of $2.5 million at the time of listing 4.$2 million in pretax earning in each of the two prior years 5.A total of $100 million in market value of publicly traded shares
Slide 9–6 Figure 9-1: Number of Listed Companies Yearly Comparison with NYSE, AMEX, and Nasdaq
Slide 9–19 Trends in the Bond Market Figure 9-8: Bonds and Stocks Issued, 1983–2000
Slide 9–20 Stock 1.Represents ownership in a firm 2.Earn a return in two ways –Price of the stock rises over time –Dividends are paid to the stockholder 3.Stockholders have claim on all assets 4.Right to vote for directors and on certain issues 5.Two types –Common stock Right to vote Receive dividends –Preferred stock Receive a fixed dividend Do not usually vote
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