Stocks and Shareholder’s Rights

  1. Introduction
  2. Securities Markets
  3. Brokers and Dealers
  4. Economic Factors
  5. Stocks and Shareholder's Rights
  6. Options
  7. Investment Products
  8. Alternative Investments
  9. Risk of Investing
  10. Trading Types and Accounts
  11. Rules of SEC and FINRA
  12. Prohibited Activities

Shareholder's Rights and Powers

Stocks and Shareholder's Rights

Shareholders' rights refer to the legal and ethical rights that investors hold in a corporation. Shareholders are the owners of a company, and as such, they have certain entitlements and privileges, including voting on important decisions, such as the election of the board of directors and major corporate transactions. Shareholders also have the right to receive financial reports, inspect corporate books and records, and sue the company's management if they believe that their rights have been violated. Shareholders can also sell their shares on the stock market and receive dividends, which are a share of the company's profits. Protecting shareholders' rights is crucial for maintaining transparency and accountability in the corporate world.

Shareholder rights and powers dividends voting rights and powers book and record inspections lawsuits and legal actions

Stocks

Stocks

There are two main types of stocks: common stock and preferred stock. Common stock represents an ownership interest in a corporation and provides the holder with the right to vote on important corporate matters, such as the election of directors and major business decisions. Common stockholders may also receive dividends if the corporation chooses to distribute profits to shareholders. On the other hand, preferred stock represents a hybrid between common stock and bonds, providing shareholders with priority over common stockholders in terms of receiving dividends and assets in the event of bankruptcy. Preferred stockholders generally do not have voting rights but may have other special rights, such as the ability to convert their shares into common stock or to receive a fixed dividend rate.

Common Stocks Preferred Stocks subtypes of preferred stocks defensive stocks growth stocks cyclical stocks

Shares

Types of Shares

Outstanding shares refer to the total number of shares that a company has issued and are currently held by investors. These shares are also referred to as "shares outstanding" or "issued and outstanding shares."

Issued shares are the total number of shares that a company has authorized to issue, which includes outstanding shares plus any shares that have been repurchased by the company.

Treasury shares, also known as "reacquired shares," are shares that a company has repurchased from the market and are held by the company itself. These shares are no longer outstanding and do not have voting rights or receive dividends, but can be reissued or retired by the company.

Understanding the difference between outstanding, issued, and treasury shares is important for investors as it can impact the calculation of various financial metrics such as earnings per share and market capitalization.

outstanding shares issued shares treasury shares

Derivitives

What are Derivatives?

In finance, a derivative is a contract or financial instrument that derives its value from an underlying asset, such as a stock, commodity, currency, or bond. Derivatives are typically used as a tool for hedging, speculation, or investment purposes. Common types of derivatives include options, futures, swaps, and forwards. These financial instruments enable investors to gain exposure to the underlying asset without actually owning it, and can offer potential benefits such as risk management, diversification, and leverage. However, derivatives can also carry significant risks and require sophisticated knowledge and expertise to use effectively.

American Depository Receipts Convertible Preferred Shares

Conversion Price vs. Conversion Ratio vs. Parity Price

Conversion Price vs Conversion Ratio vs Parity Price

Conversion price, conversion ratio, and parity price are all related to convertible securities. Conversion price refers to the price at which a convertible security, such as a convertible bond or convertible preferred stock, can be converted into common stock. The conversion ratio, on the other hand, is the number of shares of common stock that a convertible security can be converted into. Finally, parity price is the price at which a convertible security is considered to be equal in value to the underlying common stock. It is calculated by dividing the market price of the convertible security by the conversion ratio. Understanding these terms is important for investors who are considering investing in convertible securities, as they can impact the value and potential return of the investment.

Conversion Price vs Conversion Ratio vs Parity Price

Rule 144 Provisions

Rule 144

Rule 144 is a Securities and Exchange Commission (SEC) regulation that sets forth certain conditions under which restricted, unregistered, and control securities can be sold or resold. The rule applies to both public and private offerings of securities. Generally, securities that are not registered with the SEC cannot be sold to the public unless they qualify for an exemption, such as Rule 144. The rule imposes specific requirements on the resale of restricted and control securities, including the holding period, volume limitations, and manner of sale. These requirements are designed to prevent fraud and promote investor protection. By complying with Rule 144, sellers can sell their securities without having to register them with the SEC, thereby avoiding the high costs and time delays associated with registration.

Rule 144 Holding Periods Rule 144 Proper Public Info Rule 144 the 1% Rule Rule 144 Trading Conditions Rule 144 Proposed Sale Notice Rule 144 Other Provisions

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