Notes Inclass 2

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Equity can be represented in many forms (which ways we can describe)

Respresents portion of ownership in an entity


Focus on company structure in this module/ course shares issued by a company
evidences equity ownership
Networth=equity
Goodwill- asset
Intangible goods
Share script.
When comparing appropriate business structures for investors (particularly
where investors are not involved in the direct management of the business
relevant factors to assess include
Ordinary shares
Pereferance shares
Types
Company shares may be listed (publically registered on a securities exchange
for trading purposes) or unlisted (traded privately).
Also known as the stock market
The role of the stockmarket is to act as an exchange- in an orderly and liquid
context.
ASX- a well informed and transparent market for the trading in a range of
financial securities on the asx this is achieved electronically via the itsintergrated transaction system
A system allowing for the clearing and settlement of securities on the asx this
is the chess system requiring settlement on the terms T+3
Weights may be determined either by market capitalisation (number of issued
shares x current price.) note these indivies are based solely on share price
changes
Accumulation indicies includes both shares price changes and reinvestment of
dividends
Dowjones-30
Where supply > demand on average prices will fall
Where supply <demand on average prices will rise
Dividend yield: dps/share price
Earnings yield: eps/share price
Required rate = 10% K= 10% buy because that is what we want
Fundamental analysis-process u are using based on TVM context

Or technical analysis- trends in prices as a precursor, share prices follow a


random walk
Investors are rational
Managed fund
20-30 to diversify to get rid of risk

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