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Tuesday, April 12, 2005

Investment Terms for New Investors

Investment Terms Provided By Citigroup

Assets - All of a company's possessions, including but not limited to property, cash, equipment, and financial investments

Book Value - the value of an asset as it appears on the balance sheet

Broker - Registered representative who earns a commission for executing trades on behalf of buyers and sellers in the marketplace

Debt - Money borrowed through loans or the sale of bonds

Dividend Per Share - total amount paid out in dividends divided by the number of shares that the dividend is paid on.
Example: You own 100 shares of Coke, each quarter you will receive $0.28 per share x 100 shares = $28.00 in cash or you can have it reinvested in more shares of Coke. In a given year you would receive $112.00. Dividends may be raised or lowered at any time. Not all stocks have dividends. Dividends are taxable by law. Dividend stocks generally outperform non-dividend paying stocks.

Note: EX-Dividend- in order to get a dividend on a stock you must own the stock the day before the ex-dividend date.

EPS - earnings per share, calculated by the firm's total post-tax earnings divided by the number of shares outstanding.

Equity - Money borrowed through the sale of stock. A company's share capital. It is permanently employed in the business and does not have to be repaid, unless the company is liquidated. The term is most commonly used to mean shareholders' equity.

P/E Ratio - Price/earnings ratio. The company's share price divided by its earnings per share.

Stock - Also known as shares or equities, stock signifies partial ownership of a corporation. Such securities entitle the shareholder to dividends, or a percentage of the company's annual net earnings and may provide additional privileges, such as the right to vote. Two basic types of stock are common and preferred.
Generally when you purchase stock on the secondary market through a broker you purchase common stock.

3 Comments:

Blogger sun said...

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4/12/2005 9:36 PM  
Blogger Gold Trade Tips said...

good information for share market

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