CAN I BUY STOCK IN JELLO?

Make a list of 5 products that you think are great and will be money makers for the

company that produces them.

Try to guess what company makes the product.

WHO OWNS JELLO? The Kraft Heinz Company What other brands do they own?

http://finance.yahoo.com/q?s=KHC&ql=0

Definitions

Brand Name – The popular name of a product.

Parent Company – A business that owns and controls another company.

Subsidiary– A business that is owned by another company.

What other companies do you know that own other companies?

WHAT OTHER BRANDS ARE PEPSICO? http://

www.pepsico.com/Brands/BrandExplorer http://finance.yahoo.com/q?s=PEP

LOOK UP 5 PRODUCTS Create a chart on Excel with the

following

Brand Name Company Name Parent of subsidiary of what company

If your brands turn out to have the same company name pick another brand.

WHAT IS A STOCK?

Ownership of shares in a business

MANY FLAVORS, MANY STOCKSDefinitions

Opportunity Cost The second best alternative of a choice.

This is the opportunity given up by making a particular choice. (opportunity given up)

I am giving up the opportunity to spend my money now by investing in the market

Scarcity Insufficient resources to meet everyone’s

needsFewer shares of stock available, higher price I have limited resources to expend

BUYING A STOCK When you buy a stock you become part

owner of a public company – no matter how many shares you own. Stocks are sold in lots of 100 shares or more

If the stock price exceeds what you paid for it, your investment increases in value.

If the stock price goes lower than what you paid for it, your investment decreases in value.

You risk ONLY the money you invest.

WHY WOULD NIKE, APPLE AND SONY GIVE UP A PORTION OF THEIR OWNERSHIP?

If a company’s product or service is in great demand, demand may exceed the ability of banks to provide money for the company’s expansion.

At that point company leaders may decide to “go public.”

This means they “offer” the stock to the “public” through an exchangeExample: NY Stock Exchange or NASDAQ

INITIAL PUBLIC OFFERING (IPO) Company management go to investment bankers to

negotiate an agreement to underwrite (back, guarantee, finance) a stock offering know as an IPO.

The investment bankers buy all the shares that will be offered to the public at a set price (primary market).

In other words, they underwrite the IPO. The investment bankers then sell the stock to the general public (secondary market) in the hopes of making a profit.

In addition to finding underwriters, company management must register its stock with the Securities and Exchange Commission (SEC).

http://www.investopedia.com/video/play/public-company/

DIVIDEND Dividends are payments made by a

company to its shareholders When a company earns a profit, that

money can be put to two uses: it can either be re-invested in the business, or it can be paid to the shareholders as a dividend A dividend increases your “rate of return”

Many corporations retain a portion of their earnings and pay the remainder as a dividend

TYPES OF STOCK Companies can offer two types of stock,

Common and Preferred.

COMMON STOCKMost basic form of ownershipOne vote per share owned to determine

company’s Board of Directors Events that can affect stock price

The dollar value increases or decreases through supply and demand of buyers and sellers

Stock split occurs – shares owned by existing stockholders are divided into a larger number of shares

A merger of two companies Can be viewed favorably or unfavorably

Dividends are paid, making the company more desirable to hold for investors

PREFERRED STOCK Preferred stock – shares which pay fixed

dividends and have priority over common stockLess risk than common stockNo voting rightsDividends are stated as a percentage

known as the par value Fixed value stated on the stock certificate

PREFERRED SHARES

COMMON -VS.- PREFERRED STOCK An important difference between

common stock and preferred stock is that the price of the preferred stock tends to be more stable, changing little over time, than that of common stock.

Preferred stock is less risky than common stock, therefore investors can expect less reward.

NOT ALL COMPANIES ARE PUBLIC

Private companies shares are not for sale the general public.Mars Corp, the snack food giant, is privately

held.Google, was privately held until 2005, when

it went public, offering its stock for sale.

PUBLIC OR PRIVATE?

COMMON, PREFERRED, OR PRIVATE?

New York Stock Exchange (NYSE) http://www.investopedia.com/video/play/

new-york-stock-exchange-nyse/Parent Company EuroNext (Germany)

National Association of Securities Dealers Automated Quotation (NASDAQ)

http://www.investopedia.com/terms/n/nasdaq.asp

NEW YORK STOCK EXCHANGE (NYSE) Located along Wall Street in Manhattan

It caters to well-established companies like IBM, Ford, and McDonald’s

https://www.nyse.com/get-startedhttp://www.thestreet.com/story/13277966/1/key-energy-services-receives-notice-from-nyse-regarding-continued-listing-requirements.html

STOCK MARKET INDEXES The Dow Jones (“The Dow”) (NYSE)

Gauges the performance of the industrial sector of the American Stock Market

The average consists of 30 of the largest and most widely held public companies in the United States

Standard & Poor's 500 (S & P 500) (NYSE)Gauges the performance of 500 Large

Corporations, all of which are from the United States

STOCK MARKET INDEXES