Equity Securities: Rapid Fire
Chapters in this video
- 0:00 Common vs. preferred: wing vs. first class
- 1:13 Fixed dividend is not guaranteed
- 1:45 Cumulative preferred arrearages
- 2:37 Rights vs. warrants: the dilutive contrast
- 3:51 Convertible preferred: investor's option, parity rule
- 4:24 ADRs and the currency risk trap
- 5:10 Liquidation priority: debt before equity
- 5:56 Restricted vs. control: how acquired vs. who owns
- 6:42 Holding periods for reporting and non-reporting companies
- 7:05 Affiliate 10% threshold and volume limits
- 7:56 Form 144 filing triggers for control sales
- 8:21 Ex-dividend date set by exchange, never the company
- 8:49 Rapid-fire exam recap
What this video covers
- Why common stock is residual ownership with unlimited upside but zero priority, while preferred stock trades voting rights for a fixed, first-paid dividend
- How cumulative preferred arrearages must be fully satisfied before any common dividend can be paid
- The direct contrast between rights (short-term, below-market, anti-dilution) and warrants (long-term, above-market, sweetener), including who issues warrants
- Why convertible conversion is always the investor's option, never the company's, and how to calculate conversion ratio and parity
- How American depositary receipts (ADRs) trade in U.S. dollars but still carry currency risk, and which ADR level can raise capital
- The liquidation priority order from secured debt through subordinated debt, preferred, and finally common
- Why restricted is about HOW shares were acquired and control is about WHO owns them, including holding periods, volume limits, and Form 144 filing triggers
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