1
Q
What is a Share
A
Method of financing a firms assets, a firm gives up a section of ownership in exchange for money
2
Q
What is a dividend
A
a sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves).
3
Q
How are shares first issued?
A
An IPO, Initial Public Offering
4
Q
Finding the price of a preference share
A
PV formula. PV= c/r
5
Q
Finding the dividend at t=1
A
Dividend x ( 1 + r )
6
Q
rate of Return
A
D1 ( dividend at year one ) / p ( current value of share ) + g ( growth rate).
