New answers tagged

2

Transfer fees are very high but you're willing to transfer and $20,000 extra to X as a precaution against an increase in stock price? That makes no sense. Transfer fees aren't that high. Your call idea works but there's a lot of slippage (B/A spread and time premium cost). You could reduce the time premium component by buying high delta calls for which ...


3

There is a major misconception in: For example, suppose the original company has an equity of $100 million and earns $15 million (i.e. 15% return on equity). Let's say the company decides to "dilute" the shares by issuing $900 million worth of shares. The equity is now $1 billion. If the company earns the same 15% return on equity on the new $900 ...


5

Your example assumes that by issuing new shares, the company suddenly increases its values tenfold, and, most amazingly, substantially increases it's income over night. This, of course, won't happen: The company has increased its number of shares, but it's fundamental value stays the same. Therefore, the sum of the value of the shares will be basically the ...


3

There are companies that grow by this method, they grow by acquisition. Sometimes it works and sometimes it doesn't. They have to find companies they can afford, and that they believe they absorb, and can continue to generate profits. The board of directors and the stockholders have to agree with this method, and they need to generate results. What can go ...


4

It is two slightly different ways of specifying how much you want to buy when placing a market order (i.e. one that is satisfied at whatever the current price is). For simplicity, I'm assuming there's no commission or other costs associated with dealing. Suppose you were interested in a stock that is currently priced at $30 (offer price), and you've got &...


0

The formula is: (Borrow rate) x (market value of the security)/365 It's a borrow fee rather than interest. The borrow rate and the price of the security can fluctuate daily. It is charged for holding a short position overnight and is calculated daily. Typically, it accrues and is debited monthly.


15

Let’s make a slight change: instead of your brother buying your share, I’ll buy the whole house at market price, give 95% to your brother, and 5% to you. In each case you should get exactly the same money. If your brother insist you should get paid 5% of $20,000 then you offer to pay him 95% of $20,000 obviously.


8

If you were to instead sell the house would your brother expect 95% of $20,000 or 95% of $300,000? You currently own 5% of a house worth $300,000 and any payout you get for that ownership should be based on the actual value.


3

The answer to your question is 5 % of the current market value. All the other issues mentioned are emotional baggage. That doesn't mean you can't consider them. Maybe since you aren't too personally invested in the property and your brother spent a lot of time effort and money, you are emotionally satisfied with accepting 4 % or 3 %, or perhaps you feel ...


10

Surely the simple answer is 'market value'. But this isn't an open market. It's a very small market, probably consisting of just you and your brother. No-one except him is interested in buying your 5%. So the price is what he'll pay and you'll accept. Period. 'Fairness' doesn't come into it. If your 5% interest is blocking his ambitions for the property ...


7

Note that 5% of what it was worth 25 years ago in today's dollars may be more than 5% of its current worth. $1,000 in 1995 is worth about $1,729 today. Say the house was worth $100,000 in 1995 and it's worth $1,000,000 today. If it was worth $0 today, say it burned down or was discovered to have toxic waste that would cost more than the value of the ...


41

Technically it is worth what you are willing to sell it for and what he is willing to buy it for. Failing that, it is worth the current market value. If you were going to buy a home, and the you said to the sellers "Hey this property was valued at 25% less five years ago, I would like to pay that price". What would they tell you? They would tell you to ...


91

Shared property is tricky when agreements aren't made up front, but the right answer in a situation like this is basically whatever you agree to. That said, you own 5% of the property, not 5% of what it used to be worth. I would encourage you not to dismiss the value of that equity over all these years. If you had gotten 5% of the value 25 years ago you ...


0

I think the underlying problem comes from the first question you linked. There are many similar questions (which is why yours may also be closed as a duplicate), but the one you linked has an accepted answer that I consider incomplete. It talks about a company being "liquidated" but this somewhat misses the point. (See my comment on your question.) It's ...


0

Firstly, some companies do not provide dividends, so while I can understand it as adding to a shares value this cannot be the underlying reason for shares having value. See: If a stock doesn't pay dividends, then why is the stock worth anything? Secondly, most people do not end up owning enough shares to have voting rights in a company. [...] Note: ...


1

Let's say there are ten million shares, and 9,990,000 are in the hands of shareholders who are holding on to their shares and are not even looking at the stock market. 10,000 shares are traded. What would happen is that the price can go massively up or down due to demand and supply, with no realistic relation to the value of the shares whatsoever. If the ...


3

In this situation lets say only 100 shares are being traded every day by a bunch of traders do they have absolute control over the price (Not Value) of the stock ? And can they drive the price of stock to insanely low/high levels ? And then once they drive the price up enough, other people will be willing to sell some of their shares. And the ...


2

So hypothetically, Microsoft with 7.58b shares outstanding, if none were sold during a day, no new investors could buy any? Yes that is right. One can't buy if no one is ready to sell. Microsoft is a wrong example, it's a highly traded stock. There would be quite a few illiquid stocks that trade in very small quantities.


4

Everybody has a price. If no one is willing to sell at your bid, you'll have to increase it until you find a willing seller. Furthermore, for stocks listed on an exchange like the NYSE or NASDAQ, there are market makers that are committed to buying/selling.


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