321Class07-Equities - Equity Terminology Par value Market...

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Equity Terminology Par value Market value Dividends Date of record, ex-dividend date, payment date Number of shares Authorized, Issued, Outstanding, Treasury Stock Preemptive Rights, Public offerings Primary Offering vs. Secondary Market
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Stock Ratings Quality Investment Grade Good Quality Speculative Investment Characteristics Blue Chip Growth Income Cyclical Defensive
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Types Common stock Preferred stock ETFs Security Options Call Put Warrant Spread, Straddles, Straps, Strips, Strangle, Butterfly, Condor
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Stock Valuation Dividend Discount Model
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DDM Stock price Zero growth stock: Constant growth: g r Div P - = 1 0 r Div P 1 0 = t t g DIV g DIV g DIV P r ) 1 ( ... ) 1 ( ... ) 1 ( 2 2 1 1 0 + + + + + =
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Differential Growth - = + + + + = 2 6 5 5 5 1 1 0 ) 1 ( ... ) 1 ( g r DIV P NPV r DIV r DIV P
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Rate of Return g P DIV r + = 0 1 g r Div P - = 1 0 0 1 P DIV r =
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What is the growth rate ? (1)
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This note was uploaded on 10/28/2011 for the course FIN 321 taught by Professor Smith during the Fall '08 term at University of Illinois at Urbana–Champaign.

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321Class07-Equities - Equity Terminology Par value Market...

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