AAEC 2104 Lecture Notes - Lecture 4: Dollar Cost Averaging, Financial Statement, Fundamental Analysis
18 Aug 2016
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Investing on the stock market is not without risk. Investing on the stock market is all about risk and return. Why consider stocks: when you buy common stock, you purchase a part of the company, returns: Dividends the company"s distribution of profits to stockholders. Capital appreciation the increase in the selling price of a share of stock. Why to not consider stocks: neither dividends nor capital appreciation is guaranteed with common stock, dividends are paid at the board"s discretion. Capital appreciation takes place when the company does well: over time, common stocks outperform all other investments. Stocks are liquid: growth is determined by more than interest rates. Common stocks are last in line to be paid: book value, earnings per share. = net income preferred stock dividends number of shares of common stock outstanding: dividend yield, market-to-book or price-to-book ratio. Stock indexes: measuring the movements in the market.
