Securities are tradeable interests representing financial value. They are often represented by a certificate. They include shares of corporate stock or mutual funds, bonds issued by corporations or governmental agencies, stock options or other options, other derivative securities, limited partnership units, and various other formal “investment instruments.” Banknotes, checks, and some bills of exchange do not fall into this category.
A spreadsheet is a rectangular table (or grid) of information, often financial information. (It is, therefore, a kind of matrix.) The word came from “spread” in its sense of a newspaper or magazine item (text and/or graphics) that covers two facing pages, extending across the center fold and treating the two pages as one large one.
A stock option is a specific type of option with a stock as the underlying instrument, (the security that the value of the option is based on). Thus it is a contract to buy (known as a “call” contract) or sell (known as a “put” contract) shares of stock, at a predetermined or calculable (from a formula in the contract) price.
A stock split is a type of corporate action that replaces shares in a public company with more shares in the same company at a lower price. Although this leaves the market capitalization of the company the same, an increase in the number of shares leads to greater liquidity, and therefore a greater volume of trades. This often leads to a higher stock price in the short term. The lower price per share also makes the company more accessible to some smaller investors.
A stock, also referred to as a share, is commonly a share of ownership in a joint stock company. The owners and financial backers of a company may desire additional capital to invest in new projects within the company. If they were to sell the company it would represent a loss of control over the company.
A shareholder or stockholder is an individual or company (including a corporation), that legally owns one or more shares of stock in a joint stock company. Companies listed at the stock market strive to enhance shareholder value. Stockholders are granted special privileges depending on the class of stock, including the right to vote (usually one vote per share owned) on matters such as elections to the board of directors, the right to share in distributions of the company’s income, the right to purchase new shares issued by the company, and the right to a company’s assets during a liquidation of the company.
In business and accounting, shareholder equity is everything of the company that is owned by the shareholders.
In economics and in business decision-making, sunk costs are costs that have already been incurred and which cannot be recovered to any significant degree. Sunk costs are sometimes contrasted with incremental costs, which are the costs that will change due to the proposed course of action. In microeconomic theory, only incremental cost are relevant to a decision. If we let sunk costs influence our decisions, we will not be assessing a proposal exclusively on its own merits.