Chapter 8: Equity Securities: Common and Preferred Shares

In this section

• 8.1 Common Shares
  • 8.1.1 Definition and Characteristics
    Detailed exploration of common shares, ownership rights, and voting rights as essential instruments within a corporation.
  • 8.1.2 Dividends
    This section elaborates on the declaration process, significance of dividends for common shareholders, dividend yield calculation, and its interpretation as a measure of return.
  • 8.1.3 Capital Gains
    An in-depth exploration of the capital gains associated with common shares, including mechanisms of price appreciation and the nuances of tax implications in the context of the Canadian securities market.
  • 8.1.4 Risks and Benefits
    An in-depth exploration of the risks associated with market fluctuations and the significant growth potential inherent in common shares.
• 8.2 Preferred Shares
  • 8.2.1 Features of Preferred Shares
    An in-depth study of the characteristics of preferred shares as a hybrid security with both equity and debt features, focusing on fixed dividends and their priority over common share dividends.
  • 8.2.2 Types of Preferred Shares
    A detailed exploration of the different types of preferred shares, focusing on cumulative, non-cumulative, convertible, and non-convertible features.
  • 8.2.3 Priority and Claim
    Understanding the priority and claim rights of preferred shares, including claim on assets and dividend payment hierarchy.
  • 8.2.4 Risks and Considerations
    An in-depth look at the risks associated with preferred shares, focusing on interest rate sensitivity and credit risk.
• 8.3 Stock Indexes and Averages
  • 8.3.1 Purpose and Function
    Understanding the pivotal role of stock indexes in benchmarking performance and indicating market sentiment.
  • 8.3.2 Types of Stock Indexes
    An in-depth exploration of different types of stock indexes, including price-weighted, market capitalization-weighted, and equal-weighted indexes.
  • 8.3.3 Major Global and Canadian Indexes
    Exploration of major Canadian and global stock indexes used as benchmarks in the securities industry.
  • 8.3.4 Index Construction and Maintenance
    Explore how stock indexes are constructed and maintained, including selection criteria for constituent companies and procedures for rebalancing and adjustments.