macroeconomic variables and stock market indices 1.1 Introduction and Background The financial system is considered to be the key to economic growth. A well developed and sound financial system promotes investment by the identification and financing of profitable business opportunities‚ through the mobilization of savings‚ the efficient allocation of resources‚ by helping to diversify risks and by facilitating the exchange of goods and services. (Mishkin‚ 2001). As such‚ stock markets have assumed a developmental
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STOCK WARRANTS INTRODUCTION A stock warrant gives the right but not the obligation to purchase the stock of a company at a specific price and date. Some of the characteristics are: Whenever such a warrant is exercised‚ the shares that fulfil the obligation are not received from another investor but directly from the company. Firms generally issue stock warrants for raising money through equity and is usually offered at a lower price in comparison to stock options. There is no lock-in period
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Chapter 10 Stocks and Their Valuation Learning Objectives Solutions to End-of-Chapter Problems 10-1 D0 = $1.25; g1-3 = 6%; gn = 4%; D1 through D5 = ? D1 = D0(1 + g1) = $1.25(1.06) = $1.3250. D2 = D0(1 + g1)(1 + g2) = $1.25(1.06)2 = $1.4045. D3 = D0(1 + g1)(1 + g2)(1 + g3) = $1.25(1.06)3 = $1.4888. D4 = D0(1 + g1)(1 + g2)(1 + g3)(1 + gn) = $1.25(1.06)3(1.04) = $1.5483. D5 = D0(1 + g1)(1 + g2)(1 + g3)(1 + gn)2 = $1.25(1.06)3(1.04)2 = $1.6103. 10-2 = $1.35/(12%
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Review of Business Research Papers Vol. 5 No. 1 January 2009‚ Pp. 389- 404 Calendar Effects in Pakistani Stock Market Shahid Ali* And Muhammad Akbar** The paper investigates calendar anomalies in the Pakistani stock market by taking a data of stock returns of fifteen years from November 1991 to October 2006. The existence of calendar anomalies could endanger the assumption of Efficient Market Hypothesis. Using one Factor ANOVA the main hypotheses about equality in returns on daily‚ weekly and monthly
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T F 1. The first step in the top-down approach to stock valuation is analyzing the position of the industry in its life cycle. Answer: False T F T F T F T F T F 6. Industry life cycles measure the growth path of an industry through five stages. Answer: True T F 7. Industry life cycles predict an industry’s sensitivity to the economy. Answer: False T F 2. The method of starting the stock valuation process with an analysis of the economy is referred
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Abstract Nowadays it is a key issue to forecast the stock market. Forecasting stock market depends on forecasting the volatility by different linear or non-linear models. The volatility of asset returns is time-varying and predictable‚ but forecasting the future level of volatility is very difficult. Hence‚ in this study we have provided a simple‚ yet highly effective framework for forecasting a stock market by considering the transition probability and long run probability of different classified
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What is Stock Exchange? A stock exchange is the market place for the purchase and sale of second hand securities. It provides "trading" facilities for stock brokers and traders‚ to trade shares of the listed companies and other financial instruments such as Term Finance Certificates and Derivatives. Stock exchanges also provide facilities for the issue (listing)‚ redemption (delisting) of securities and other capital events including the payment of income and dividends. It is a key institution for
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Topic: Bonds 6) Sun co.’s bonds‚ maturing in 7 years‚ pay 8% interest on a $1‚000 face value. However‚ interest is paid semi-annually. If your required rate of return is 10%‚ what is the value of the bond? How would your answer change if the interest were paid annually? 7) Sharp Co. bonds are selling in the market for $1‚045. These 15 year bonds pay 7% interest annually on a $1‚000 par value. If they are purchased at the market price‚ what is the expected rate of return? 8) You own a bond
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Seminar Questions – Stock Valuation 1. How much should you pay for the preferred stock of the Dakota Doorknob Company if it has $100 par value‚ pays $8.50 a share in annual dividends‚ and your required rate of return is 10 percent? 2. NDV Corp.’s common stock is expected to pay a $2 dividend‚ which will grow at a compound rate of 4 percent indefinitely. a. If the market requires a 14 percent return‚ what should be the current market price of the stock? b. If the
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If you were a manufacturer holding a substantial inventory of a product that has been outlawed in the United States‚ would you have any ethical concerns about selling the product in countries that do not prohibit its sale? Suppose the inventory write-down that you will be forced to take because of the regulatory obsolescence is material- nearly a 20 percent reduction in income will result. If you can sell the inventory in a foreign market‚ legally‚ there will be no write-down and no income reduction
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