9.4 Find the English equivalents to the following phrases in the text:

долговое обязательство; финансирование путём выпуска акций; привилегированные акции; совет директоров; сертификат акции; отчётные документы фирмы; обанкротиться; пользоваться преимуществом перед; рисковать; колебания курсов ценных бумаг; наиболее высокий доход; отдавать предпочтение; выплата дивидендов; привлекать покупателей; коэффициент окупаемости капиталовложений; фиксированный размер дивиденда; рыночная стоимость.

9.5 Make up ten English sentences using words from the active vocabulary of the lesson

9.6 Which passage of the text contains information on:

1. risks of common stock;

2. two types of stock;

3. advantages and disadvantages of preferred stock.

9.7 Are these statements true, false, or not mentioned in the text?

1. Equity financing is financing by selling common or preferred stock to investors.

2. The terms of preferred stock are negotiated between the corporation and the investor.

3. Each stockholder must buy 25 percent of shares a year.

4. Common stock may be issued only on a par basis.

5. A fixed dividend rate makes preferred stock safer than common stock.

9.8 Choose the correct answer

What privilege of common stockholders have over preferred stockholders?

1. They receive dividends.

2. They run no risk.

3. They vote for the Board of Directors.

4. They run the risk.

9.9 Substitution drill

Statement: The Board of Directors declares a dividend based on the earnings and expected growth of the corporation.

Example: the authorities

The authorities declare a dividend based on the earnings and expected growth of the corporation.

1. anticipated	3. program	5. inflow	7. announce
2. grounded on	4. profit	6. firm

9.10 Read the dialogue

Susan Morgan, a young engineer, wants to buy stock in BMT tele­phone company. She is talking to a BMT agent

Agent: Well, Miss Morgan, have you made up your mind?

Susan: Why, yes. I only want to clear up some points before we make a deal.

Agent: I am all ears, Miss Morgan. And I’ll do my best.

Susan: I’ve seen the prospectus, but I haven’t seen all of the necessary numbers. How much will you pay?

Agent: Do you mean the dividend?

Susan: Right. I might have missed the point, eh?

Agent: Oh, no, we don’t print this, actually. It’s up to the Board of Directors to decide how much to pay. But usually it’s about 25 percent. And we pay it quarterly.

Susan: So, if I buy 100 shares with a face value of $100 each that would mean that my annual revenue will be $2500?

Agent: That’s correct. And you can also profit by market value increase.

Susan: And what’s that? Can I have some more details?

Agent: Well, market value is the current price at which each share of stock is being bought and sold. If the market value goes up, the dividends will also increase.

Susan: And what happens if the market value goes down?

Agent: Well, if you are worried about fluctuation, then you could buy preferred stock. It’s much safer. The dividend is less than 25 percent though.

Susan: Oh, no, I’d take the common one. And one more point. Do I have to participate in all the meetings of the shareholders? I’m very often away on business, you know.

Agent: As a matter of fact, you are entitled to cast your vote to elect the Board of Directors. But don’t worry. If you are away and can’t attend the annual meeting cast your vote by proxy.

Susan: And what’s that?

Agent: Oh, it’s a written authorization person to cast your vote. Look, I’ve got an example here. It’s just a card. You have to sign here and put the names you vote for.

Susan: Fine! Then I’ll certainly be one of your shareholders.

Agent: You couldn’t have made a better choice, really.

Words and expressions

to make up somebody’s mind	- принять решение, решиться
to clear up	- здесь: прояснить
to make a deal	- совершить сделку
to be all ears	- слушать внимательно
to miss	- пропустить, не заметить
to be up to somebody	- входить в чьи-либо обязанности
quarterly	- поквартально
to cast a vote	- подать голос
proxy	- уполномоченный, о также документ, с помощью которого владелец акций может голосовать, фактически отсутствуя на собрании акционеров