Types of Capital Markets: Primary - ANSWERinsurer sells securities to raise capital
Types of Capital Markets: Secondary - ANSWERtransactions between investors
Public securities offering - ANSWERsecurities sold to the general public
Private securities offering - ANSWERsecurities sold to pri...
- straight (noncumulative): missed dividends are not payable
- cumulative: missed dividend (dividends in arrears and current preferred dividends must be paid
before common)
- Callable: issuer may buy back shares after a specified date at a specified price
- Participating: issuer may pay more than stated dividend
- Adjustable rate: dividend tied to another rate (example t-bill rate)
Equity: Rights and warrants - ANSWERRights: available to existing shareholders, short term, exercise
price below CMV. Opportunity for existing stockholders to maintain percentage of ownership
Warrants: offered with other securities, sold as units. long term, exercise price above CMV when
issued (anticipated value with time)
Equity: Real estate investment trusts (REITS) - ANSWER- traded on exchanges or OTC
- provide liquidity for real estate investors
Real Estate Investment Trusts - ANSWERClosed-end funds that invest in real estate and mortgages.
Debt Securities (Bonds): Bond Maturities - ANSWERTerm: entire issue matures on one date
Serial: issue matures over a period of years
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