Module 6

Question 1

How to calculate earnings per share?

Answer 1

Profits attributable to ordinary shareholders/number of shares in issue

Question 2

How to calculate dividend per share?

Answer 2

Dividend paid/number of shares in issue

Question 3

How to calculate dividend yield?

Answer 3

Dividend per share/share price x 100

Question 4

How to calculate market capitalisation?

Answer 4

Share price x number of shares

Question 5

How to calculate the price/earnings ratio (P/E)?

Answer 5

Market price per share/earnings per share

OR

Market capitalisation/earnings

Question 6

How to calculate dividend cover? (C’vr)

Answer 6

Profits attributable to ordinary shareholders/dividends paid

Question 7

How to calculate the earnings yield?

Answer 7

Earnings per share/share price x 100

Inverse of the P/E radio
1/PE

Question 8

The flat yield of loan stock is calculated as?

Answer 8

Coupon/market price x 100

Question 9

What are the Financial Indices?

Answer 9

FTSE 100
FTSE 250
FTSE 350
FTSE Small Cap 
FTSE All-Share
FTSE AIM
FTSE techMARK
FTSE landMARK

Question 10

How to calculate an index?

Answer 10

Index divisor: Total market value/index value