tailieunhanh - Lecture Money and capital markets: Chapter 20 - Peter Rose, Milton Marquis

Chapter 20 - The market for corporate stock. In this chapter students will be able to learn about the characteristics of common and preferred corporate stock; to compare and contrast the roles and functions of the organized stock exchanges and the over-the-counter market; to explore the issue of market efficiency. | Chapter 20 The Market for Corporate Stock Learning Objectives To learn about the characteristics of common and preferred corporate stock. To compare and contrast the roles and functions of the organized stock exchanges and the over-the-counter market. To explore the issue of market efficiency. Introduction to the Stock Market Equity is a certificate representing ownership of a corporation. It grants the right to share in the firm’s assets and earnings, if any. Stock market activity involves mainly the trading of issued securities rather than the exchange of financial claims for new capital. Nevertheless, the stock market has a significant impact on the expectations of businesses when planning future investments. Characteristics of Corporate Stock All corporate stock represents an ownership interest in a corporation, conferring on the holder a number of rights as well as risks. Common stock represents a residual claim against the assets of the issuing firm, entitling the owner to .