股票市场基础知识StockMarketBasics.ppt

Stock Market Basics How a Company “Goes Public” -- Mr. Yates Some Financial Terms Earnings per Share: The amount of profit to which each share is entitled. Going Public: Slang for when a company is planning an IPO. IPO: Short for Initial Public Offering. An IPO is when a company sells stock in itself for the first time. Terms continued… Market Cap: The amount of money you would have to pay if you bought ever share of stock in a company. (To calculate market cap, multiply the number of shares by the price per share.) Short for Market Capitalization. Share: A share represents an investors ownership in a share of the profits, losses, and assets of a company. It is created when a business carves itself into pieces and sells them to investors in exchange for cash. Ticker Symbol: A short group of letters that represents a particular stock (e.g., Coca Cola is referred to as KO.) Underwriter: The financial institution or investment bank that is doing all of the paperwork and orchestrating a companys IPO. Purpose of the Stock Market Almost every large corporation started out as a small, mom-and-pop operation and through growth, became financial giants. Wal-Mart, Dell Computer, and McDonald’s had combined profits of $10.34 billion this year. Wal-Mart was originally a single-store business in Arkansas. Stock Market Dell computer began with Michael Dell selling computers out of his college dorm room. McDonald’s was once a small restaurant no one had heard of. How did they grow? How did these small companies grow from tiny, hometown enterprises to three of the largest businesses in the American economy? They raised capital by selling stock in themselves. Example of a Company: New to Public After getting married, a young couple decided to start a business. It would allow them to work for themselves, as well as arrange their hours around their family. Both husband and wife have always had a strong interest in furniture, so they decide to open a store in their h