Banking/ Stocks&shares / Bonds

Kyooho Jang, Jeeye Jang, Jeongeun Kwon

Unit 14. Banking

BUSINESS ADMINISTRATION

201100210 Kwon Jeong Eun

• In general terms, the business activity of accepting and safe-guarding money owned by other individuals and entities, and then lending out this money in order to earn a profit.

Banking

• Liquidity

available cash, and how easily other assets can be turned

into cash

• Stockbroking buying and selling stocks or shares for clients

• Solvency ability to pay liabilities when they become due

• Conglomerate a group of joined companies, operating in different fields

• Collateral anything that acts as a security or a guarantee for a loan

Vocabulary

UNIT 15. STOCKS and SHARES

BUSINESS ADMINISTRATION201103007

Jeeye Jang

• One day, customer demand more products.

• Form his own corporation to sell shares in his business and raise the capital he needs.

How the Stock Market Works

• Go to State Government, to get a corporation charter and a permit.

How the Stock Market Works

• Go to Investment Banker, and show the record of past performance and plans.

• And Investment Banker decides to help.

How the Stock Market Works

• Before any shares in the corporation can be sold, certain information is filed with the securities & exchange commission.

• The Investment Banker and the owner must swear that the information they filed contains nothing but the truth

How the Stock Market Works

• After registration, Investment Banker pays the owner exchange for a cer-tain number of shares of corporation.

How the Stock Market Works

• Then Investment Banker sells shares of the common stock to people.

• Meanwhile, money received from the sale of shares yield a new and better planwhich produces more and better products.

How the Stock Market Works

• Stockholders elect the directors of corpora-tion. Boards of directors are responsible for the way business’s run.

• Directors determine the amount of divi-dends

to the stockholders.

How the Stock Market Works

• One way to get additional capital is to sell more stocks to many more people.

How the Stock Market Works

Limited company

• Legal entity that is separate from it’s owners, and is only liable for the amount of capital that has been invested in it.

• Co.,Ltd

• cf. UNLIMITED COMPANY ??- Partners are liable for the company without a limit.

Private limited company

Memorandum of Association/Certificate of In-corporation

- company’s name, purpose, registered office, authorized share capital

Articles of Association/Bylaws

- set out the duties of directors and the rights of shareholders/stockholders

Public limited companySuccessful companies can apply to a stockexchange to become a public limited company/listedCompany

Have to send their shareholders an independently audited report every year, containing the year’s trading results and a statement of their financial position.

• Companies can is-sue new shares when they want to raise more money for expansion. They are offered to existing share-holders at first at less than market price.

• Issue new shares to shareholders instead of paying dividends when they chose to capitalize part of their profit.

Rights issue Bonus issue

Value of shares• Share owners can vote at a company’s An-

nual General Meeting/Annual Meeting of Stockholders.

• Share owners receive a proportion of dis-tributed profits on the form of dividend or company’s residual value if it goes into liq-uidation

Unit 15. Bonds

BUSINESS ADMINISTRATION

200602803 Jang Kyooho

BONDS A debt instrument issued by governments , cor-

porations and other entities in order to finance projects or activities

In essence, a bond is a loan that investors make to the bond’s issuer

They help governments and Corporations fund expansion, Research and development, And other important projects.

Bond Investing Bond investing is the purchase of the bonds or debt of a

company or government.

Treasury bonds – issued by Government

Corporate bond - Companies issue corporate bonds to bor-row money from investors instead of securing a loan from a bank.

Vocabulary Equity financing : issuing shares

Debt financing : issuing bonds

Bearer certificate : a security whose owner is no registered with the issuer

Liquid : easily sold(turned into cash)

Par : nominal or face value(100%)

Coupon : the rate of interest paid by a fixed interest security

Yield : the rate of income an investor receives taking into ac-count a security’s current price.

Quiz Show

• An arrangement by which a cus-tomer can withdraw more from a bank account than has been de-posited in it, up to an agreed limit – 50 points

A. Overdraft B. Debit card

(O)

• A plastic card issued to bank customers for use in cash dis-pensers

- 50 points A. Cash card B. Credit card

(O)

• A company considered to be without risk – 50 points

A. Conglomerate B. Blue chip

(O)

• Anything that acts as a security or a guarantee for a loan – 50 points

A. Liquidity B. Collateral

(O)

Right issue

• They are newly issued and of-fered to existing share holders.

• 100 points

Memorandum of Association/Certificate of Incorporation

• It is written for borrowing money. It involves company’s name, purpose, the amount of authorized share capi-tal.

• 200 points

Co.,ltd • The abbreviation of limited com-

pany

• 70 points

Value of shares (50 points each) • Share owners can vote at a company’s An-

nual General Meeting/Annual Meeting of Stockholders.

• Share owners receive a proportion of dis-tributed profits on the form of dividend or company’s r.esidual value if it goes into liq-uidation

Bearer certificate

• a security whose owner is no registered with the issuer 

• 100 points

Yield

• the rate of income an investor receives taking into account a security’s current price.

• 100 points

Debt financing

• issuing bonds 

• 50 points

Coupon

• the rate of interest paid by a fixed interest security

• 50 points

Thank you very much