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Calendar year change in price so far this year.Dec. 31st price = $50
$55.50 - $50 = $5.50 increase
5.50 50. = .11 = 11%
• Own 1 share of XYZ stock = $90
• Stock split is declared
• Now own 2 shares ($45 ea.) = $90
What is a Stock Split? (2:1)
Reverse Stock Split? (1:2)
• Own 2 shares of XYZ stock = $90
• Stock split is declared
• Now own 1 shares = $90
A preferred stock is
so-named because its owner receives preferred
treatment relative to owners of
common stocks.
Pepsicopf (PEP)
The latest annual
dividend the company has paid to stockholders.
A dividend is a portion of the company's
profits that it pays to stockholders.
DIVIDENDS
• A company can only pay its stockholders dividends if it earns a profit.
• Still, many companies that earn a profit don’t pay dividends because they prefer to keep the money to reinvest in their growth.
DIVIDENDS
Consider a quarterly dividend (paid every three months, or quarter of a year) of $0.15.
In order to express this amount at an annual rate, you would multiply it by 4, since there are 4 quarters in a year.
The newspaper would then report a dividend of 4 x $0.15 or $.60 per share.
The yield is the latest annual dividend divided by the stock's latest closing price.
Many companies don't pay dividends, however, so this column would be blank.
But Invest Mints did pay a dividend of $1.10 per share, which is 2.0% of its closing price of
$55.50. ($1.10/$55.50 = 0.02 = 2.0%). So the 2.0 shown in this column means the
company's dividend yield was 2%.
price/ earnings ratio, which is a company's closing price divided by its annual earnings per
share (usually after deducting taxes).
If last year's earnings are used, it is called the trailing P/E ratio.
. Invest Mints' earnings per share for the most recent year was $1.50 (not shown in table).
Dividing the closing price of $55.50 by this number yields a PE of 37 ($55.50/ $1.50 = 37).
• If a company loses money during the year, it will have no earnings to put in the denominator of the PE ratio. - company’s GROWTH RATE
• In that case, the newspaper will probably put two
small "ds" in this column to indicate that the company lost money during the year.
• Unless a company earns money, it cannot have a price/ earnings ratio.
• P/E ratio = closing price of stock / earnings per share
This column presents the stock's volume (or sales) for the day, which is the total number of shares
traded.
Here, the number is given in hundreds, so you must add two zeroes to the end of the number.
This column presents the closing price (or last price) of the stock on this particular day, which means it was the last price at which the stock
traded on that day.
Invest Mints closed at $55.50 per share, but on the previous trading day it had closed at $56.38 per
share.
The net change for today was thus a minus $0.88 ($55.50 – $56.38 = –$0.88).
How stock comes to the market. .
• 1) A corporation decides to raise money by issuing shares of stock
• 2) The corporation hires an investment banker • 3) The investment banker sells the stock to
investors in an Initial Public Offering (IPO) • 4) Investors who buy the stock either keep it or
eventually sell it in the secondary market to other investors who want to buy it.