Equity Flashcards
Direct Markets
A type of market where the buyer and seller must contact one another directly.
Broker Markets
A broker facilitates the transaction by bringing the buyer and seller together.
commission
The broker will help you establish a fair offering price, give you ideas on how to improve, and act as a go between to earn commission on the sales.
Dealer Market
takes ownership of the product before reselling it to the final user.
Money Markets and Capital Markets
Are primarily broker and dealer markets. Buy or sell orders are placed with a broker, who takes the orders to the marketplace and tries to find a willing party to take the opposite side of the transaction.
Porters Five Forces
- Competition
- Substitutes
- Supplier Power
- Buyer Power
- New Entrants
Difference between bills, notes, and bonds
- T-bill: Maturity of one year or less, is sold at a discount
- Note: Maturity of two, three, five, and ten years, interest is paid semi-annually
- Bond: Maturity of ten years or more, interest is paid semi-annually
Money Vs. Time-Weighted Return
Money-weighted: IRR
Time-weighted: HPR = ((MV1 - MV0 + D1 - CF1)/MV0)
Where: MV0 = beginning market value, MV1 = ending market value,
D1 = dividend/interest inflows, CF1 = cash flow received at period end (deposits subtracted, withdrawals added back)
ex ante
forward-looking
ex post
based on actual results
Ibbotson and Chen model abbr.
EINFL: expected inflation
EGREPS: expected growth rate in real earnings
EGPE: expected growth rate in the P/E ratio
EINC: expected income component
- Operating Income
- g
- Capital expenditure (Capex)
- Net PPE
- EBIT
- ROE x b
- FCInv
- Net Property Plant and Equipment
Public Investment Bankers
Tombstone Ad
Underwriting Syndicate
