New answers tagged stock-markets
2
votes
Are owners of companies that offer public stocks without paying dividends receiving free money?
Yes in essence they are, but with strings attached
An owner could try to convert investments into private profit. But most jurisdictions would consider this fraud. In essence the owner is promising ...
- 627
3
votes
Accepted
Alibaba shares price discrepancy in US and Hong Kong
The ADR share represents 8 shares of the original share, which is (by chance) currently around the HKD/USD conversion rate, so their numbers look similar.
As of now, one Alibaba share is worth 77.25 ...
- 2,293
3
votes
Are owners of companies that offer public stocks without paying dividends receiving free money?
Is X essentially receiving free money By Initially selling the stocks to the shareholders?
No, because X does not get the money; his company does. By making the company public, X is no longer ...
- 559
9
votes
Are owners of companies that offer public stocks without paying dividends receiving free money?
The corporate investment bank that facilitates taking the company public is in the best position to get "free money". (Well, it's free in exchange for services rendered, but I digress...)
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- 191
3
votes
Are owners of companies that offer public stocks without paying dividends receiving free money?
X only gets "free money" if their share of the company is worth more that it was initially sold for.
Say X's company (Y) is worth V and X owns N shares. X's private shares are worth V/N per ...
- 130k
13
votes
Are owners of companies that offer public stocks without paying dividends receiving free money?
Common stock in a company represents ownership rights in that company.
If you own stock of a company you become a shareholder with certain rights. Among other things, you are allowed to vote during ...
0
votes
Why should I use ROIC instead of P/E given that that is the price I'm paying to buy stock?
ROIC provides the necessary context for other metrics such as the price-to-earnings (P/E) ratio. Viewed in isolation, the P/E ratio might suggest a company is oversold, but the decline could be ...
1
vote
Should I include negative values to calculate the average PE ratio?
It makes no sense to average together positive and negative P/E ratios. As earnings decrease smoothly, the P/E ratio approaches positive infinity, then experiences a discontinuity (jump) to negative ...
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1
vote
Why should I use ROIC instead of P/E given that that is the price I'm paying to buy stock?
Since these two metrics are closely related in the sense that a high ROIC will tend to mean a high P/E (and conversely) you cannot really consider one in preference to the other. Also, keep in mind ...
- 6,400
1
vote
Why should I use ROIC instead of P/E given that that is the price I'm paying to buy stock?
ROIC is a measure of how well a company has used its capital to generate returns. It can be used to compare the efficiency or effectiveness of similar companies, or to see if a company is making ...
- 130k
0
votes
Should I include negative values to calculate the average PE ratio?
GIGO.
If you start picking only values you like, it isn't an average; it's an average of the subset you picked.
If you have a good reason for wanting the latter, fine; label it appropriately rather ...
- 42.9k
-1
votes
Should I include negative values to calculate the average PE ratio?
I would - because you're thinking about treating an entire sector as one company with one price and one "Net Income". so you would use the weighted totals of both, including negative numbers....
- 130k
1
vote
Accepted
Is Implied- and Historical Volatility based on solely Business days?
A) For historical vol (HV), also called realized vol (RV), usually the so called close-to-close estimator is used, but more sophisticated methods to estimate HV exist as well (see for example R). HV ...
- 2,451
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