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All Formulas:
MPIP
N
+1
n
Where:
Application 1:
One shareholder
Solution:
Answer:
AR assignment right
P price of old shares
N number of old shares
n number of new shares
PN
N +n
Pn
N +n
shareholders:
Nr.
Form of dilution
Computing
relationship
CD = IV0 IVt
IVt < IV0
DEPS = EPS0
- EPSt
DRV =
RV t
IV 0
PC 1
N 0+n
PC 0
N0
SC 0+ SC 1+ LR
N 0 +n
EPS 0
EPS t
SC 0+ LR
N0
RV 0
Interpretation
The right of old
shareholders on issuers
assets decrease with DC
The right of old
shareholders to dividends
payment decrease with
investment yield
The right to vote of a
shareholder decrease if it
maintain the same number
of shares
IV t
;
Pnet 0
N0 ;
Pnet t
N 0+ n ;
Pnet 0
= FRR* PC 0 ;
Pnet t
FRR* PC 1 ;
RV 0
Nos
100
;
N 0+ n
Nos
100
;
N0
RV t
Where:
0 express the basic moment/period
t the period after capital increase
IV intrinsic value
SC equity capital of issuer
LR legal reserves established by the issuer
PC own capital of issuer
N0
number of shares issued by the JSC at basic moment
Nominal value:
NV =
SC
N
Where:
NV nominal value
SC social capital
N number of issued shares
Application:
An
N
AV - Accounting value
An Net Asset
N total number of issued & outstanding stocks
Net Asset is represented by one part from the companys asset that is not
affected by its debts. An = At Dt
Where:
An total debts
At total(real) assets
Dt total debts
Intrinsic value:
IV =
Anc
N
Where:
IV intrinsic value
Anc corrected net asset
N number of outstanding stocks
IV =
PC
N
SC+ LR
N
Where:
SC social capital
LR legal reserves created by the issuer
CP own capital created from social capital (SC) and legal reserves (LR)
N - number of issued and outstanding stocks
Return value:
Vf=
DPS
AIR
Where:
Vf
financial value
Yield value
V y=
BPS
AIR
Where:
VY
yield value
Issue value:
IP = NV + ip
Where:
IP issue price
NV nominal value
ip issue premium
Earnings(profit) per
share 2
EPS =
Pn
N
Where:
EPS profit per share
Pn net profit (gross profit minus income tax)
N total number of shares on market
Dt
N
Where:
DPS dividend per share
Dt total value of dividends (net profit distributed as dividends (NPr))
N - number of stocks on market
Dn
100
Pn
Where:
d - rate of dividend distribution
Pn net profit
Dn - net dividends calculated after income tax payment on dividends
calculated according to relation:
Dn =
D(1-T)
Where:
T dividend tax rate
Application:
According to Victoriabank JSCs report for 2015 year, it shared dividends
amounting to 15 000 000 lei, and the net profit obtained was about 73 324
142 lei. Determine the rate of dividend distribution and to conclude the right
thoughts about JSLs dividend policy.
Solution:
Dn
100
Pn
d=
15 000 000
= 20,45
Return on share:
R=
D+C 1C0
100
C0
Where:
R - return on share:
D distributed dividend for one share
C1
rate of stock sale
C0
Application:
An investor bought 120 stock from Victoriabank JSC, at the beginning of
2015 year, at the rate of 105 lei per stock. In that year, JSC shared a dividend
in size of 1,15 lei per share. At the end of the year, the investor sold stock on
the market price with 133 lei. Which will be the yield obtained by the
investor?
Solution:
R=
D+C 1C0
100
C0
=>
1,15+133105
100
105
= 27,76
Answer: The yield obtained by the investor for that transaction was 27,76 %,
the idea is that for each leu invested, he gained 0,27lei profit.
PER =
Rate
EPS
Where:
PER price earning ratio
Rate stock rate
EPS earnings(stock) per stock
Application:
In 2015 at the Moldova Stock Exchange, the stocks of Fincombank JSC they
were trading at the rate of 123 lei per stock. According to JSCs report, for the
same period, it obtained a profit per stock in size of 5,02 lei. Which is the
value of PER coefficient and motivate the decisions of investor actions of
buying or selling that stocks.
Solution:
Rate
EPS
PER =
=>
123
5,02
= 24,5
Dividend yield:
div=
DPS
100
Rate
Where:
div dividend per yield
DPS dividend per stock
Rate average stock exchange rate of share
Application:
If in 2015 at the Moldova Stock Exchange, the stocks of Fincombank JSC
they were trading at the rate of 115 lei per stock. According to JSC, for the
same period of time, it distributed a dividend with the size of 1,05 lei. Its
known that one div for one stock of Moldova Agroindbank JSC for the
same period was 0,70 %. Which companies stocks are more advantageous
for investition, depending on dividend yield?
Solution:
div=
DPS
100
Rate
=>
1,05
100 =0,91
115
DPS
NV
* 100%
Where:
RIC return on invested capital
DPS dividend per stock
NV nominal value
V =
i=1
Di
(1+ k)i
Where:
V theoretical value of one stock
Di
dividends at I moment of time
k return rate required by shareholders
D1
Rate
Where:
kg-