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Questions and Answers
What is the denominated value of a share?
What is the denominated value of a share?
- Book value
- Intrinsic value
- Face value (correct)
- Market value
What is the income received from the ownership of shares called?
What is the income received from the ownership of shares called?
- Capital gain
- Dividend (correct)
- Interest
- Return on investment
What is the owner of shares in a company called?
What is the owner of shares in a company called?
- Stakeholder
- Shareholder (correct)
- Equity holder
- Investor
What is the unit of equity ownership in the capital stock of a corporation referred to as?
What is the unit of equity ownership in the capital stock of a corporation referred to as?
What is the premise for valuing shares in different markets?
What is the premise for valuing shares in different markets?
What is a cash flow in its narrow sense?
What is a cash flow in its narrow sense?
How is a cash flow CF determined?
How is a cash flow CF determined?
What is the transformation process of a cash flow into a cash flow of the same value in t0 known as?
What is the transformation process of a cash flow into a cash flow of the same value in t0 known as?
What are the inputs in financial models such as internal rate of return and net present value?
What are the inputs in financial models such as internal rate of return and net present value?
What does being profitable not necessarily imply?
What does being profitable not necessarily imply?
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Study Notes
Share Ownership and Valuation
- The denominated value of a share is its nominal value.
- The income received from the ownership of shares is called dividend.
- The owner of shares in a company is called a shareholder.
- The unit of equity ownership in the capital stock of a corporation is referred to as a share.
Valuation and Cash Flow
- The premise for valuing shares in different markets is the present value of expected future cash flows.
- In its narrow sense, a cash flow is a flow of money into or out of a business.
- A cash flow (CF) is determined by the inflows and outflows of cash within a specific period.
- The transformation process of a cash flow into a cash flow of the same value in t0 is known as discounting.
Financial Modeling
- The inputs in financial models such as internal rate of return and net present value are cash flows.
- Being profitable does not necessarily imply creating value, as it only considers the return on investment.
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