FİNANSAL PİYASALAR VE KURUMLAR - Deneme Sınavı - 5

Dividend refers to the proportion of net profit that is paid to the stockholders.

Right to preemption refers to the right of existing stockholders to purchase new stocks issued in the event of capital increases in proportion to their shares in the existing capital.

Right to demand information refers to the right of the stockholders to receive information about all types of company operations.

Preferred stocks provide a priority right on profit and company’s assets in case of liquidation in respect to common stockholders.

Holders of common stocks are the residual owners of the company since they have voting rights and take risks associated with the company; The others are the features of preferred stocks.

Macroeconomic factors such as inflation, interest rate, growth and company based factors such as dividend, profitability and capital structure affect the supply and demand of stocks.

The discounted dividend model (DDM) is one of the basic and oldest models used in stock valuation. In this technique, the present value of a stock is calculated by discounting the future dividends or net cash flows obtained from operations of the company (Korkmaz and Ceylan, 2007, p. 250).

In the constant dividend model, it is assumed that the growth is provided by internal funds of the company, and therefore the dividends paid to the stockholders does not change over the time (Dt = D) (Kasper, 1997, p. 38). This model is suitable especially for stable companies and the companies in the maturity stage.

The main function of stock markets is to bring the companies and the investors together.

Volatility is a measure of risk that reflects the variability in price or return of a financial variable.

Dividend refers to the proportion of net profit that is paid to the stockholders.

Right to preemption refers to the right of existing stockholders to purchase new stocks issued in the event of capital increases in proportion to their shares in the existing capital.

Par or face value is a legal term and refers to the minimum amount of money that the stockholders have to pay per share.

Book value refers to accounting value reflected in the financial statements.

Preferred stocks provide a priority right on profit and company’s assets in case of liquidation in respect to common stockholders.

P=5*(1+0.03)/(0.10-0.03)=$73.571

Price−Earnings Ratio=Payout Ratio/ (k − g)

P/E ratio=0.50/(0.12-0.05)=7.143

MV/BV= Market Capitalization/ Book Value=(12*500,000)/1,000,000=6

London Stock Exchange is an old stock market, which was founded in 1895. LSE is located in London, which is the financial center of the world, and it is the largest stock market of Europe.