Introduction to Finance

f
Stocks
betas, examples, 367
t
certificate
defined, 266
example, 266
f
dividend, defined, 272
dual-listed stocks, 315
hyping, accusations, 406
options, defined, 407
portfolio, stocks/Treasury bond returns/
returns (example), 360
f
prices
peak, 143, 185
reactions, 357
quotation, information, 269
f
quotes, reading, 269–270
repurchases, 270–274
restricted, defined, 408
returns, 359
f
reverse split, 273
share repurchases, 274
split, defined, 273
U.S. Treasury bonds, relationship, 360
valuation, 284–289
constant dividend growth rates, usage, 
285–287
constant dividends, usage, 
285–286
risk, 287
Stop-loss order, defined, 317
Store of value, defined, 27
Straight through processing (STP), 266
Strategic plan, vision/mission (usage), 383
Strategy, financial plans (linkage), 404
Street name, 320
defined, 266, 318
Strengths, Weaknesses, Opportunities, and 
Threats (SWOT) analysis, 523
Strike price (exercise price), defined, 337
Strong-form efficient market, defined, 356
Subchapter S corporation, defined, 388
Subordinated debenture, defined, 262
Subprime mortgage, defined, 184
Sunk cost, defined, 542
Supplemental Liquidity Providers (SLPs), 
defined, 316
Suppliers, trade credit, 504
Supply, demand (relationship), 138–142
Surplus economic unit, defined, 23
Surpluses, powers, 110–112
Survival stage, 180
Small Business Development Centers 
(SBDCs), 109
Small businesses
bank financing, 503
credit, commercial bank provision, 81
credit types, usage, 51
government financing assistance, 109
government financing assistance for, 109
starting, 25
venture capital, financing source, 570
working capital management, importance, 
470
Small business investment companies 
(SBICs), 109
Small Business Resource Center, 538
Small companies, success (habits), 384
Small firms, importance of, 6
Small investor, diversification, 358
Small-size silver certificates, switch 
(occurrence), 30
Small venture firm, life cycle patterns, 170
SML. 
See
Security market line
Social Security
federal pension plan, 50
primary expenditures, 171
Sole proprietorship (proprietorship), defined, 
384
Special dividend, defined, 271
Special drawing rights (SDRs), 169
defined, 133
Speculative inflation, defined, 211
Speculative motives, defined, 469
Speculative value of an option, defined, 
339
Spending
discretionary, defined, 171
mandatory, defined, 171
Spending power, local currency, 33
Spontaneous financing, 494
Spot exchange rate, defined, 137
Spot market, defined, 334
Spot rate (SR), 137–138, 160
Spread, defined, 301, 317
Spreadsheet functions, usage, 530
Spreadsheet programs
availability, 227
built-in financial functions, 223
Stand-alone principle, defined, 540
Standard and Poor’s 500 (S&P500), 469
futures contract, listing, 336
f
index, 325
returns, plot, 374
f
Standard deviation, 346–348
defined, 316
usage, problem, 348
Standard loan, calculation, 65
Standard of value, defined, 27
Start-up firm, financing sources, 256
Startup stage, 180
State-chartered banks, 61
Statement of cash flows, 391, 396–398
defined, 397
sources, 397
uses, 397
Statement of income (statement of 
operations), 391
Securities Exchange Act of 1934, 303, 312
Securities firms
defined, 48
functions of, 50
Securities markets, 321
careers, 17
opportunities, 328–329
indexes, 324–327
issuance (
See
Primary securities markets.)
Securitization
defined, 183
usage, 262
Security market line (SML), 375–376
approach, 572–573, 576
example, 376
f
usage, 572–573
Seesaw effect, 260, 567
Selection stage, defined, 524
Semiannual compounding, usage, 241–242
Semi-annual interest rate, calculation, 277–278
Semistrong-form efficient market, defined, 357
SEOs. 
See
Seasoned equity offerings
Settlement price, defined, 336
Shareholder value, focus, 402
Shareholder wealth
calculation, 402–403
increase, employees (impact), 403
t
measurement, 402–403
Shelf registration, defined, 306
Short sale, defined, 318
Short seller, margin requirements, 318
Short-term credit, availability, 195
Short-term debt instruments, 34, 197
Short-term debt security, repurchase 
agreement, 35
Short-term finances, management, 457
Short-term financing
advantages, 498
consideration, example, 515
cost, 515
factors, 495–499
influences, 498–499
long-term financing, mix decisions, 496
operating characteristics, 495–498
patterns, 497