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Textbook
1. Common stock
1.1 Basic characteristics
1.2 Rights of common stockholders
1.2.1 Pro-rata share of dividends
1.2.2 Board of Directors
1.2.3 Inspection of books and records
1.2.4 Maintaining proportionate ownership
1.2.5 Stock splits
1.2.6 Assets upon liquidation
1.2.7 Transfer ownership
1.3 Trading
1.4 Suitability
1.5 Fundamental analysis
2. Preferred stock
3. Debt securities
4. Corporate debt
5. Municipal debt
6. US government debt
7. Investment companies
8. Alternative pooled investments
9. Options
10. Taxes
11. The primary market
12. The secondary market
13. Brokerage accounts
14. Retirement & education plans
15. Rules & ethics
16. Wrapping up
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1.2.3 Inspection of books and records
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1. Common stock
1.2. Rights of common stockholders

Inspection of books and records

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Inspecting books and records sounds complicated, but it’s fairly straightforward. A company’s performance is something investors want to keep track of. Stockholders should be concerned with the success of their company as their performance influences profit.

Investors have the right to “inspect the books and records" of the companies they’re invested in. The Securities and Exchange Commission (SEC) also enforces reporting requirements for publicly traded companies by requiring these documents to be created and distributed regularly:

10-K annual report

  • Audited financial report
  • Example: Tesla 10K filing

10-Q quarterly report

  • Unaudited financial report
  • Example: Microsoft 10Q filing
Key points

Financial reporting

  • Publicly traded companies must file ongoing financial disclosures

10-K annual report

  • Audited financial report

10-Q quarterly report

  • Unaudited financial report

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