Corporate Stocks: Assignments Chapter 21 Corporate Stocks: Assignments

© 2009 South-Western, a part of Cengage Learning

Stock exchange Corporation Stock broker Capital stock Commission T E R M S Corporate Stocks and Stock Transactions Corporation Capital stock Charter Stock certificate Par No-par stock Stock exchange Stock broker Commission Total cost Proceeds 1 © 2009 South-Western, a part of Cengage Learning

Figure 21.1 Daily Stock Report from the NYSE © 2009 South-Western, a part of Cengage Learning

Stock Transactions 1 © 2009 South-Western, a part of Cengage Learning

Figure 21.2 Confirmation Report of a Stock Purchase © 2009 South-Western, a part of Cengage Learning

Round Lot Odd Lot T E R M S Round and Odd Lots Usually is 100 shares. Consists of any number of shares less than 100 (1 to 99 shares is an odd lot for a stock with a 100-share round lot). When odd lots are purchased, a small extra charge, or odd-lot differential, is commonly added to the round-lot price. The differential is added to the price for a purchaser and deducted from the price for the seller. 2 © 2009 South-Western, a part of Cengage Learning

Computing the Costs and Proceeds of Round and Odd Lots 2 © 2009 South-Western, a part of Cengage Learning

Board of Directors Dividend Rate T E R M S Corporate Oversight A group of people elected by shareholders to oversee the operations of the corporation. The board has sole authority to distribute the firm’s earnings (to declare a dividend) to the shareholders. Dividend Rate A certain percent of the par value of the stock or a flat amount of money per share 3 © 2009 South-Western, a part of Cengage Learning

Computing the Rate of Yield and Gains or Losses 3 © 2009 South-Western, a part of Cengage Learning

Convertible Preferred Stock T E R M S Types of Stocks and Dividends Common Stock The usual type of stock issued by a corporation. Preferred Stock Gives holders a right to share in earnings and liquidation before common shareholders do. A firm must first pay dividends to the holders of preferred stock before anything is paid to the holders of its common stock. May be designated as cumulative—if the firm doesn’t pay the specified dividend, the unpaid amount (dividend in arrears), carries over to the following year or years. Convertible Preferred Stock Can be converted into a stated number of common shares 4 © 2009 South-Western, a part of Cengage Learning

Computing Comparative Earning Potential E X A M P L E Computing Comparative Earning Potential 4 © 2009 South-Western, a part of Cengage Learning

Computing Comparative Earning Potential (cont’d) E X A M P L E Computing Comparative Earning Potential (cont’d) 4 © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock For calculations, use $0.20 a share for commissions unless the problem gives a flat fee and $0.125 for the odd-lot differential. Round all percents to two places. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock Solve the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock Solve the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock Solve the following problem. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock Solve the following problem. © 2009 South-Western, a part of Cengage Learning

Assignment 21.1: Buying and Selling Stock Solve the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock The information in problem 1 also applies to problems 2 and 3. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock The information in problem 1 also applies to problems 2 and 3. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock Solve the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock Solve the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock B Do not consider commission in the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock B Do not consider commission in the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock B Do not consider commission in the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock B Do not consider commission in the following problems. © 2009 South-Western, a part of Cengage Learning

Assignment 21.2: Capital Stock B Do not consider commission in the following problems. © 2009 South-Western, a part of Cengage Learning

Chapter Terms for Review board of directors capital stock charter common stock convertible preferred stock corporation cumulative preferred stock declare a dividend dividend in arrears no-par stock odd lot odd-lot differential par preferred stock price/earnings ratio (P/E) proceeds (from sale of stock) rate of yield round lot stockbroker stock certificate stock exchanges stock transactions total cost (for purchaser of stock) © 2009 South-Western, a part of Cengage Learning