Stock+Market+Lessons

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Corporation : A company legally seperate from stockholders who own it and the managers run it.
Entrepreneur : A person who organizes, operates, and assumes the risk for a business venture. Partnership : A company owned and managed by two or more people who share its profits or lesses. A partnership is not seperate from its owners, who are liable for the company's debts. Private Corporation: A corporation that does not sell shares to the public. You can't buy shares of a private company in the stock market. Public corportion: The stock of a poublic company is owend and traded by individual and institutional investors. In contrast, the stock is held by company founders, employees, and sometimes venture capitalists. Sole-Proprietorship: A company owned and run by one individual who receives its profits or bears its losses. A proprietorship is not separate from its owner, who is liable for the company debts.

Company Example:



If you saw a piece of candy, wrapped in foil, shaped like the picture above, do you immediately know it is a Hershey's kiss? Why is this candy so well known? Do you know how or where it is made? How is the kiss marketed? Have you ever bought this candy? What do you think it took to invent and then develop this candy?

Website: http://www.hersheys.com/discover/milton/milton.asp

Explore the website beginning at the Entrepreneur tab on the right hand side. Think about the following questions:
 * How did Milton Hershey get the idea to market chocolate?
 * How was he able to make it available to everyone?
 * How did he raise money to expand the company?

Discussion: What is a company? What ways can business raise capital? What ways did Milton Hershey raise money? What type of business were his first two businesses? What type of business was his 3rd attempt?

Investment Decisions: Based on what you discovered, is Hershey a company that in which you might like to invest your money?

Lesson 2
Companies need money to expand and grow. "Going public", or selling shares of stock to investors, is one way to raise money. Borrowing money from a bank is another way for companies to pay for expansion and growth.

This is a list of interest rates over a seven-year period:

1. From a company's perspective, it is better to have a high interest rate when it borrows money? Why?
 * 2000 || 2001 || 2002 || 2003 || 2004 || 2005 || 2006 ||
 * 8.5% || 9.5% || 4.75% || 4.25% || 4.0% || 5.25% || 7.25% ||

2. In which year would it have cost companies the most to borrow money? In which year would it have cost the least? How do you know?

3. Write a formula that expesses the interest that a company will pay on a one-year loan at a specified interest rate. i=interest l=loan r=rate

Interpreting Statistics
Vocab Trend -the general course or prevailing tendency; drift: trends in the teaching of foreign languages; the trend of events.

Use the document below to answer the following questions: 1. Which company had the greatest profits in 2006? 2. Describe the trend in profits for Company A. 3. Describe the trend in profits for Company C. 4. Describe the trend in profits for Company B. 5. Based on the information, in which company would you invest? Why?



=Lesson 3: Stockholder Rights and Responsibilities=

Vocabulary

Annual Report: By law, each publicly held corporation must provide its shareholders with an annual report showing its income and balance sheet. In most cases, it contains not only financial details but also a message from the chairman, a description of the company's operations, and an overview of its achievements.

Liquidation: Process by which assets of a business are converted to money.

Long position: The condition of owning stock. The value of a long position is a stock’s current share price multiplied by the number of shares owned.

Proxy: If you own common stock in a U.S. corporation, you have the right to vote on company policies and to elect the company's board of directors. You may vote in person at the annual meeting or authorize the board to vote on your behalf using an absentee ballot, or proxy, which you can submit by mail or, increasingly often, by telephone or over the Internet.

Shareholder: An individual or company (including a corporation) that legally owns one or more shares of stock in a stock company. The shareholders are the owners of a corporation.

Students will be able to:

• Determine the rights of stockholders in various situations.

• Draw conclusions as to actions individual shareholders can take as responsible corporate owners.

• Define: proxy, annual report.

__** Chew Toy, Inc. **__ Imagine you own 1000 shares of Chew Toy, Inc., the largest producer of interactive toys for dogs and cats. You have more than doubled your money since you first invested in the company four years ago.

The company has recently taken the following actions:

• The board of directors has declared a $2 per share dividend.

• Management has declared that workers can no longer bring their dogs to work.

• Despite recent questions about his performance and policies (e.g. the CEO’s dog was allegedly paid $35,000 for posing in the company’s catalogues) the board has awarded the company’s CEO a $500,000 bonus.

• The company has decided to issue a new stock offering.

The company is holding its annual meeting in Little Rock, Arkansas and you cannot attend though you want to vote on many issues on the agenda. For example, you would like to vote against the company’s new policy banning dogs at work. You also feel strongly that the CEO’s bonus is too exorbitant, especially in lieu of the controversial payment to his dog. You would also like to buy more shares in the company before outsiders drive up the price.

What rights do you have to express your opinions and pursue your point of view? Complete the first two columns of Activity 1: SMG KWL Chart on your own.

Discuss your responses with your SMG team and classmates then complete the first two columns of a new KWL as a class.



Read Fact Sheet 1 and then complete the third column of the KWL chart.



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