Financial Markets and Organizations

Midterm: 24
th
October, Friday. 2pm. Closed Book, bring approved calculator
Interview skills: Study RMB Internationalization paper, Shanghai Hong Kong Stock Connect
Ch 21: Stock Markets
Stocks represent ownership, and are the last priority to be paid. Some companies do not declare
dividend at all.
ETF: Exchange traded Funds
A basket of securities that are actively managed that are indexed to a specific portfolios
Valuing stocks: 4 methods
Gordon Growth Model
Assumption that dividends grow forever
G has to be less that required return on equity
Generalized Dividend Valuation Model
PE Ratio is the price the market is willing to pay for 1$ of earnings
PE Ratio is generally used to compare with competitor