GLOSSARY

Common Terms

Stock Ownership of a corporation indicated by shares, which represent a piece of the corporation's assets and earnings.

Earnings per share (EPS) A company's profit divided by its number of common outstanding shares. If a compnay earning $2 million in one year had 2 million common shares of stock outstanding, its EPS would be $1 per share.

Market capitalization The total dollar value of all outstanding shares. Computed as shares times current market price. Capitalization is a measure of corporate size.

Market value (1) The price at which a security is trading and could presumably be purchased or sold. (2) what investors believe a firm is worth; calculated by multiplying the number of shares outstanding by the current market price of a firm's shares.

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