ECONOMICS Chapter 8 Part 2 Funsheet Key

1. The standard we are covering is SSEMI4. 2. A stock is a certificate of ownership in a corporation. 3. A dividend is the portion of corporate profits paid out to stockholders. 4. A bond is A FORMAL CONTRACT TO REPAY BORROWED MONEY WITH INTEREST AT FIXED INTERVALS. 5. Principal is the dollar amount borrowed. 6. Interest is the price paid to use anothers money. 7. Mergers are a combination of two or more companies into a single firm. 8. A horizontal merger is when two or more firms that produce the same kind of products join forces. 9. A vertical merger is when firms involved in different steps of manufacturing or marketing merge. 10. A conglomerate is a business combination merging more than three businesses that make unrelated products.