Stock Market Background Check Return on Equity: The ultimate measure of a stock’s success. ROE shows you the rate of return to shareholders by dividing net income by total shareholders equity. Bigger is always better with this number because it means the company is making a lot of money off the investments that shareholders have made. A good return on equity is anything above 20% Earnings per Share: This is the king of growth measures. EPS takes what a company earns and divided that by the number
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Topic 1 business valuation introduction Financial assets Three main types: 1.fixed interest or Debt 2.Shares or Equity 3. Derivative Securities (Futures, Options) Fixed interest: 1.Payments fixed or determined by a formula 2. Money market debt: short, term, highly marketable(市场的), usually low credit risk 3. Capital market debt: long term bonds, can be safe or risky 4.Subject to Interest Rate movements (Yield Curve) and Credit Risk Equity Securities: 1.ownership of a corporate entity 2.secondary
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“When the price of a stock can be influenced by a “herd” on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical.” ------------------------------------------------- This report will analysis the statement by Warren Buffett, and it considers the contrasting evidence on the validity of the observation on the Efficient
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Section 3.4 1. Which of the following statements are true of an object moving in a circle at a constant speed? Include all that apply. a. The object experiences a force which has a component directed parallel to the direction of motion. b. Inertia causes objects to move in a circle. c. There can be a force pushing outwards on the object as long as the net force in inwards. d. Because the speed is constant, the acceleration is zero. e. If the net force acting upon the object is suddenly reduced
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7 FACES OF PROFITS It’s that time of the year when quarterly reports flood mailboxes and dailies, and the words ‘earnings’ and ‘profit’ jump out from all over. But which profit should you consider to evaluate a company? What is the utility of profitability measures? Here’s a guide to understanding profits. Gross Profit What is it? It is the amount earned from sale of products after deducting production costs. What it does: Signals efficiency with which a company is making money. Indicates
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Case 3: Ben & Jerry’s 1) Ben & Jerry’s has not been successful in fulfilling all three elements of its mission statement. Ben & Jerry’s has been successful in the element of “Product”; they have continued to make, distribute, and sell the finest quality super premium ice cream in a wide variety of flavors. Ben & Jerry’s has also been successful in the element of “Social”. Since 1985 Ben & Jerry’s has donated 7.5% of its pretax earnings to various social foundations and
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Adverse selection is a type of information asymmetry whereby one or more parties to a business transaction, or potential transaction, have an information advantage over other parties. Moral hazard is a type of information asymmetry whereby one or more parties to a business transaction, or potential transaction, can observe their actions in fulfillment of the transaction but other parties cannot. Financial reports reduce information asymmetries between managers and investors by supplying information
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MGMT E-2000 Fall, 2014 Problem Set 5 (Due Tuesday, Nov. 18) 1. (10 points) Calculate the price of a stock that has a one-period horizon, is expected to pay a dividend of $.20 per share for the period, with the following prices and associated probabilities forecast at the end of the period: |Probability |0.3 |0.1 |0.2 |0.3 |0.1 | |Price |$40 |$45 |$55 |$62 |$70 | The return on comparable stocks
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Laboratory Experiment 2: Fundamental Frequency of a Beam Due: October 9th, 2015 Submitted: October 9th, 2015 Table of Contents Abstract | 2 | List of Symbols and Units | 3 | Theory | 4 | Procedure and Experimental Setup | 8 | Sample Calculation | 9 | Error Analysis | 12 | Results | 13 | Discussion and Conclusion | 16 | References | 18 | Appendix | 19 | Abstract The experimental analysis of rotating equipment and the fundamental frequency of an attached beam
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Lecture 7: Valuation of Shares (Fundamental Analysis) Introduction Fundamental Analysis It helps us determine the value of a share by studying the intrinsic factors such as earnings potential, dividend growth, required rate of return, and factors relating to company, the industry, and the economy. Analysis of a company’s financial data helps us to predict the movement of that company's stock price. A potential (or current) investor uses fundamental analysis to examine a company’s operations and
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