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Unformatted text preview: suppose we look at the S&P
Index during the period 1926–2004. The
data here show a 70 percent likelihood of
earning a positive investment return
over a one-year period, but an 86.5 percent chance of a positive investment
return if you held the stocks in the index
over a five-year period. The probability
of a positive return went up to 97.1 percent if you held the stocks for 10 years. In
other words, the longer you hold stocks in
the stock market, the more likely you will
earn a positive return. • Ticker. In this column you see “ROK,”
which is the stock or ticker symbol for
Rockwell Automation Incorporated. • Div. In this column, the number, in this
case “1.02,” indicates that the last annual
dividend per share of stock was $1.02.
For example, a person who owned 5,000
shares of Rockwell Automation stock
would have received $1.02 per share or
$5,100 in dividends. (If this space is
blank, then the company does not currently pay out dividends.) • Yield %. The yield of a stock is the dividend divided by the closing price.
Yield Dividend per share/Closing price per
share The closing price of the stock (shown in
one of the later columns) is 47.54, or $47.54.
If we divide the dividend ($1.02) by the closing price ($47.54), we get a yield of 2.1 percent. A higher yield is better, all other things
being the same.
• P/E. The PE ratio, or price-earnings
ratio, is obtained by taking the latest
closing price per share and dividing it
by the latest available net earnings per
share. In other words, 16 (428-459) EMC Chap 16 EXHIBIT 11/18/05 16-4 9:34 AM Page 441 Reading the Stock Market
Reading the Stock Market Page of a Newspaper
high (3) (4) (5) Stock Ticker Div 45.39
51.25 PE (2)
% 2.30 20.9 1.02 2.1 Vol 00s. Volume in the hundreds, or
6412 here, translates to 641,200. In
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- Winter '14