1 CHAPTER 23 INVESTMENTS IN STOCKS AND BONDS OF OTHER COMPANIES.
3 - Investments - Stocks Mar 9
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Transcript of 3 - Investments - Stocks Mar 9
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Investing in Stocks
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What are stocks?*When you purchase a stock (equity), you receive a piece of the company. *As one of the many owners of the company, you technically own a piece of the company. *A company raises money by issuing stock. *The total value of stock held by the public is the company’s market capitalization, or "market cap". *A stock is considered a riskier investment than a bond (debt) and thus requires a higher rate of return.
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Why Buy stocks?
*Historically, equities (Stocks) have provided superior longterm returns compared to cash and debt investments.
Common share ownership in Canadian public companies offers many potential benefits to investors, including:
* Capital appreciation * Dividends * Voting privileges * Liquidity (shares can easily be bought or sold) * Dividend tax credit and capital gains tax
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*Equities do typically fluctuate more in value.
*It’s important to take a longterm perspective when investing in equities.
Long Term Investment
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How can you buy them?*The stock markets are places where buyers and sellers meet to trade in person or electronically.
*In Canada the Toronto Stock Exchange (TSX) is the largest stock exchange. (Founded 1878)
*Smaller market cap stocks trade on the TSX Venture Exchange. *In the US, the New York Stock Exchange (NYSE) (Founded 1792)and NASDAQ are the most important exchanges, and are in fact the largest in the world.
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Jeric wants to purchase 500 shares of Manitoba Telecom. What will the shares cost him?http://cxa.marketwatch.com/tsx/en/market/quote.aspx?symbol=mbt
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If Jeric's stock broker charges him a fee of 2% of the order value, calculate Jeric's total cost.
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Calculate Laura's total profit/loss for the following transactions:Week 1: Laura purchases 100 shares of Astral Media ACM.A for $26.75/share. Her broker charges her 3% commission.
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Week 2: Laura sells her shares of Astral Media for $31.25/share. Her broker charges her 3% commission.
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Assignment #3
Questions 1 4