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Unformatted text preview: Chapter 6: 10-15 Questions Chapter 10 : 12-15 Questions Chapter 7, 8, 9: 12-15 Questions Test Outline: A claim to the profits that the firm makes. Stock: a claim to partial ownership in a firm. ○ Higher risk and potentially higher returns. The sale of stock to raise $ - EQUITY FINANCING ○ The stock exchanges: the NY Stock Exchange, the American Stock Exchange & NASDAQ ○ Price (of a share) Volume (number of shares sold) Dividend yield: dividend/price □ Dividend (profits paid to stockholders) cf. retained earnings Higher P/E: expect earnings to rise (overvalued stock) □ Lower P/E: expect earnings to fall (undervalued stock) □ Price-earnings ratio (P/E): the price of a corporation's stock divided by the amount the corporation earned per share over the past year. Most newspaper stock tables provide: ○ STOCK MARKET: Take deposits from savers and use the deposits to make loans to borrowers. Pay depositors interest on their deposits & charge borrowers slightly higher interest rates on...
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- Spring '08
- Macroeconomics, equity mutual fund