The Stock Market The stock market plays a significant role in the health of the economy; the economy has to be strong for a country and its citizens to prosper · What is a Stock Market Finance Essay A stock market also known as an equity market is a public entity where shares are issued and traded either through exchanges or over-the-counter markets. It provides companies with a platform to raise capital and investors with a percentage of ownership in the company/5(29) · Read Full Paper ❯ Stock market, there are a number of factors that will have an impact on share prices. This is because of perceptions about: future prospects for the company and the effect of new products / services on the earnings per share. In the case of Apple, the stock
Stock Market Essays: Examples, Topics, Titles, & Outlines
A stock market also known as an equity market is a public entity where shares are issued and traded either through exchanges or over-the-counter markets. It provides companies with a platform to raise capital and investors with a percentage of ownership in the company, stock market essay.
The New York Stock Exchange is the largest stock exchange in the USA, in terms of market capitalization. In Asia, few of the prominent examples include the Tokyo Stock Exchange, the Bombay Stock Exchange etc.
The stock market allows shares of businesses to be publicly traded, or raise additional financial capital for expansion through additional stock offerings. The liquidity that an exchange provides to the investors gives them the ability to easily buy and sell securities, stock market essay. Some companies actively increase liquidity by trading in their own shares.
Share prices and stock market movements are an important part of the dynamics of economic activity, and is often considered a good indicator of economic health of a nation, stock market essay. An economy where the stock market is on the rise is considered to be a healthy economy. Rising share prices, for instance, tend to be associated with increased business investment and vice versa, stock market essay.
Share prices also affect the income levels of households and their spending and consumption patterns. Therefore, central banks tend to keep a watchful eye on the smooth operation and stability of the financial system. A wise investor would want to purchase shares at a rate which is lower than the intrinsic value, which may be quite different from the market price which is determined by the forces of demand and supply of the share.
Therefore, an asset may trade at a price which is significantly below or above its perceived intrinsic or fundamental value. The purpose of estimating intrinsic value is to take advantage of mispriced assets. If the market value of an asset is above its intrinsic value then the investor might choose to sell the asset.
If the market value of an asset is below intrinsic value then the investor might choose to purchase the asset. In broad terms, there are 3 commonly used methods to calculate the intrinsic value of a stock:- Discounted Cash Flow or NPV Analysis The most common technique is the discounted cash flow DCF analysis for calculating the net present value.
In simple terms, the DCF technique tries to compute the value today, stock market essay, based on projections of all of the cash flows that the company aims to generate during a few years in the future. cash to be received in the future is stock market essay less than that received today.
The DCF technique can be outlined in 4 steps as follows:- Step 1: Forecast the expected cash flows of the company. Various assumptions regarding the growth rate, working capital requirements etc. will have to be used in order to arrive at a relatively accurate forecast, stock market essay.
Step 2: Compute the discount stock market essay to be stock market essay for computing the NPV of the cash flows, stock market essay. This rate is also known as the Weighted Average Cost of Capital WACC. Step 3: Calculate the value of the company by using the WACC to discount the expected cash flows. to get the Value to Common Equity and then divide this by the number of shares outstanding.
The advantage of DCF analysis is that it is based on stock market essay cash flows FCFwhich is less subject to manipulation than figures and estimates computed using the financial statements of a company. It is also forward-looking and relies more on the future performance of the company, rather than past trends, stock market essay.
This technique works under the assumption that there is no growth. Therefore, analysts believe that this is a simpler way to analyze stocks than DCF analysis which relies on speculative growth assumptions for the stock market essay. However, it does rely on an assumption about the cost of capital, stock market essay, as well as the fact that current earnings are sustainable with several adjustments.
Asset-based methods These methods require analysis and computed based on figures available in the financial statements of a company such as Income Stock market essay, Balance Sheet etc. One of the techniques the liquidation value technique aims to estimate the value at which the various assets of the company such as land, machinery etc.
can be sold off, after accounting for any liabilities that may be outstanding at that point of time. What Is A Stock Market Finance Essay. com, Jun 26, Accessed May 31, comJun We will send an essay sample to you in 2 Hours. If you need help faster you can always use our custom writing service. What is a Stock Market Finance Essay. Did you like this example? Having doubts about how to write your paper correctly?
Get started. Leave your email and we will send a sample to you. Email Get sample. Thank you! Get help with my paper. Sorry, but copying stock market essay is forbidden on this website. You can leave an email and we will send it to you. Didn't find the paper that you were looking for?
What is your topic? Number of pages. Deadline 0 days left, stock market essay. Any subject. Pay if satisfied.
15 Books Warren Buffett Thinks Everyone Should Read
, time: 13:42What Is A Stock Market Finance Essay - Free Essay Example | blogger.com
· What is a Stock Market Finance Essay A stock market also known as an equity market is a public entity where shares are issued and traded either through exchanges or over-the-counter markets. It provides companies with a platform to raise capital and investors with a percentage of ownership in the company/5(29) · Stock Case Analysis Essay equally among four stocks (3D Systems, Microsoft, Nordstrom and Sony), our portfolio has been liquidated, analyzed, and compared to the surrounding markets by investing the same $, in each of 3 different Capital markets are the financial markets in which stocks, bond, debenture, etc., can be traded between the buyers and the sellers. Capital market is very much essential for the functioning of the economic output. The trading in the capital markets are done for the long What Affects Market Efficiency
No comments:
Post a Comment