Equities Flashcards
1
Q
Growth Industry
A
characterized by above-normal expansion in sales and profits independent of the business cycle
2
Q
Enterprise Value (EV)
A
= market value of common and preferred stock
+ market value of debt
- cash and short-term investments
3
Q
Beta of an asset
A
Covariance (mkt, asset) / variance of mkt
4
Q
Holding Period Yield from EAY
A
= [(EAY + 1) ^ t/365] - 1
5
Q
Effective Annual Yield from HPY
A
= [(1 + HPY) ^ 365/t] - 1
6
Q
Embryonic Stage
A
slow growth
high prices
large investment needed
high risk of failure
7
Q
Growth Stage
A
rapid growth
falling prices
limited competition
increasing profitability
8
Q
Shakeout Stage
A
slower growth intense competition declining profitability cost cutting weaker firms fail or merge
9
Q
Mature Stage
A
slow growth
consolidation
stable prices
high barriers to entry
10
Q
Decline Stage
A
negative growth
declining prices
consolidation
