Stocks

Stocks Why do people invest in common stock?: Investors who purchase common stock can make money in three ways. - Income from dividends - Dollar appreciation - Possibility of increased value from stock splits

Preferred Stock: Why do corporations issue common stock? - May attract conservative investors - Cumulative preferred stock - Convertible preferred stock - Participation feature

7 Types of Stock: 1) Blue Chip Stocks - is a safe investment that generally attracts conservative investors 2) Income Stock - pays higher-than-average dividends compared to other stock issues 3) Growth Stock - is issued by a corporation whose potential earnings may be higher than the average earnings predicted for all the firms in the country 4) Cyclical Stock - has a market value that tends to reflect the state of the economy 5) Defensive Stock - is a stock that remains stable during declines in the economy 6) Large Cap and Small Cap Stocks - A large cap stock is the stock of a corporation that has issued a large number of shares of stock and has a large amount of capitalization. A small cap stock is a stock issued by a company with a capitalization of $150 million or less

Capitalization _________ is the total amount of stocks and bonds issued by acorporation the stocks listed in the Dow Jones averages are typically large cap stocks. These stocks appeal to conservative investors.