Stock Market Flashcards
Define shares
Shares are a proportionate interest in an enterprise and are traded on this market
What is the stock market
Stock markets allow for trading of shares of public companies
What is the par value of shares
Par value is a legal stated value on the shares
What is meant by the market value of a stock
Market Value = Expected future benefits = expected future dividends
Define authorised shares
A cap on the maximum number of shares that can be issued, legal ceiling
Define issued shares
Number of shares actually sold by the company
Define outstanding shares
Number that were issued and are still held by the public
Define PE ratio
Details the amount that investors pay for one dollar of earnings, and so the higher it is the more growth expected by the investors
Define ticker
an acronym for the stocks Ex Netflix: NFLX
Explain dividend cover
How well covered the dividends are covered by earnings
Formula for Market Value (Capitalisation)
Market Value (Capitalisation) = Number of shares x Price per share
Formula for dividend per share
DPS = Dividends/ No. of shares
Formula Dividend yield
Dividend Yield = DPS/ Share Price
Formula for dividend payout ratio
Dividend payout ratio= Total dividends/net income or DPS as % of EPS
Formula for EPS
Basic EPS = Net income/ No. of shares
