Equity Project Questions

Name ____________________________________

This project should be well organized and grammatically correct. Ensure that all references have been cited or a severe penalty will be applied. Select two U.S. equity positions to include in your portfolio. Answer the questions below in full sentences. Again answers which are not numeric must be in a full sentence or ten points will be deducted. Make sure you use your own words. Do not write an essay. When answering questions make sure you capitalize the name of any firms. The paper will count for 15% of your final grade.

DO NOT DELETE THE QUESTIONS. There is a 20 point penalty, if you do.

Equity #1 Questions (This stock must pay dividends.)

1. Describe what is an equity position.

1. What are the advantages and disadvantages of an equity? DO NOT PUT BULLET POINTS. Use full sentences for ALL questions.

1. Select a stock for your investment. What is the stock's name?

1. What is the stock's ticker?

1. What is the stock price?

1. If you invest $200,000 in the stock, how many shares would you get?

Amount Invested	/ Stock Price	= Number of Shares

1. Would you pay any fees when you buy these shares?

1. Explain what trends you see in the stock price over the last five years. Also, include a graph (which you can find on the internet) to display this trend.

1. Define an Initial Public Offering (IPO).

1. What was the IPO like for this firm? Include the IPO date, number of shares issued and launch price.

1. How much did the firm raise in funds?

# of shares issued	X Launch price	= Amount Raised

1. If you bought one share during the IPO, how much of a capital gain or loss would you have?

1. Has the stock had any stock splits? If it had a stock split, explain the details for one of the splits.

1. Once you already own the stock, would you want the stock price to go up or down and why?

1. If the price of your stock went up by $5, would you have a gain or loss and how much? Show calculations.

Number of shares
New Price per share
Total Value of Shares after Increase
Capital Gain or Loss

1. If the price of your stock went down by $5, would you have a gain or loss? Show calculations.

Number of shares
New Price per share
Total Value of Shares after Decrease
Capital Gain or Loss

1. Did the stock pay any dividends over the last year?

1. How much would you have received in dividends? Include a picture of your source. Show your calculations.

Number of shares
Dividend per share
Total Amount of Dividends

1. What does the Dividend Yield of this firm tell you and how would you calculate it? Show your calculations and include a picture of your source.

1. What is the Earnings Per Share (EPS) Ratio? How would you calculate it for your equity? Show your calculation and include a picture of your source.

1. What is the Dividend Payout Ratio? How would you calculate for your equity? Show your calculation and include a picture of your source. If your equity did not pay dividends just explain the ratio.

1. Now pretend like you are selling the shares. The day you finish this project find the price of the stock and use it to calculate the capital gain or loss. Show your calculations in the chart below and include picture of the source.

Sold Price (price today)
Purchase Price (from question #5)
Total Capital Gain or Loss per share
*Number of Shares
Total Capital Gain or Loss

1. Calculate the holding period return. Show your calculations in the chart below and include picture of the source.

Holding Period return:	Income + Capital Gain or Loss Per Share / Purchase Price

Equity #2 Questions

1. Select a stock for your investment. What is the stock's name?

1. What is the stock's ticker?

1. What is the stock price?

1. If you invest $200,000 in the stock, how many shares would you get?

Amount Invested	/ Stock Price	= Number of Shares

1. Explain what trends you see in the stock price over the last year. Also, include a graph (which you can find on the internet) to display this trend.

1. Has the stock had any stock splits? If it had a stock split, explain the details for one of the splits.

1. Did the stock pay any dividends over the last year?

1. How much would you have received in dividends? Include a picture of your source. Show your calculations.

Number of shares
Dividend per share
Total Amount of Dividends

1. Now pretend like you are selling the shares. The day you finish this project find the price of the stock and use it to calculate the capital gain or loss. Show your calculations in the chart below and include picture of the source.

Sold Price (price today)
Purchase Price
Total Capital Gain or Loss per share
*Number of Shares
Total Capital Gain or Loss

1. Calculate the holding period return. Show your calculations in the chart below and include picture of the source.

Holding Period return:	Income + Capital Gain or Loss Per Share / Purchase Price

Portfolio Questions

1. What impact has the economy had on your portfolio? Explain how it can impact your portfolio.

1. Is the portfolio well diversified? Why?

1. What is the total return for the portfolio? Calculate how much your portfolio earned.

	Capital Gain or Loss
Equity #1
+ Equity #2
Total Gain or Loss

1. Which investments had the best and worst returns and why?

1. If doing this project again from the beginning (selecting the securities) what might you do differently?

References - must be included or there is a ten point penalty.