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Chapter 2 Financial Market Environment. Financial Markets How do we measure Short- term in business? How can you characterize or label financial markets?

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Presentation on theme: "Chapter 2 Financial Market Environment. Financial Markets How do we measure Short- term in business? How can you characterize or label financial markets?"— Presentation transcript:

1 Chapter 2 Financial Market Environment

2 Financial Markets How do we measure Short- term in business? How can you characterize or label financial markets? What is an IPO?

3 Who is Warren Buffett? http://www.youtube.com/watch?fe ature=player_detailpage&list=PLQce nk- Mor84RRkEemdKyI0RhTUJ81cTZ&v= rX2-syAt_HA http://www.youtube.com/watch?fe ature=player_detailpage&list=PLQce nk- Mor84RRkEemdKyI0RhTUJ81cTZ&v= rX2-syAt_HA http://www.youtube.com/watch?fe ature=player_detailpage&v=idr6c8N HuWs http://www.youtube.com/watch?fe ature=player_detailpage&v=idr6c8N HuWs

4 How are stock prices “created”? Supply and Demand – What makes supply curve shift? – What about the demand curve? Supply Curve Demand Curve

5 Exchanges Stock exchanges http://www.youtube.com/watch?v=T PUDPhpCecA&feature=player_detailp age Commodities exchanges http://www.youtube.com/watch?v=_ UXomMnQKT4&feature=player_detail page

6 Calculating taxes Different types of taxes? – Ordinary – Captital gains ST vs LT

7 What kind of taxes do individuals pay? Type of taxTax Ordinary income Capital gains (ST) Capital Gains (LT) Dividend Income Interest Income Do people care what kind of income they receive? How can you minimize you tax liability?

8 Tax Brackets

9 EBT = $150,000 Calculate Tax Calculate Average tax rate Marginal tax rate = ?? Calculate Net Income

10 EBT=$20,000,000 Calculate Tax Liability Calculate Net Income Calculate ATR What is the marginal tax rate?

11 Complete the table below Taxable IncomeTax dueNet IncomeAverage tax rateMarginal tax rate 97,000 4,000,175 4,000,176 125,000,000

12 Assignments Pearson Chapter 2 Quiz (30pts) Chapter 2 Online HW (15pts) Offline Chapter 2 Offline HW (50pts) Chapter 2 Web Exercise (12pts)

13 Exercise In yahoo finance Go to Summary (4) – Last Trade Price? – Price range for past 52 weeks? – PE ratio? – EPS ? Go to Key statistics (4) – Revenue? – After tax income? – Book value per share? – Beta?

14 Exercise Go to www.zacks.com (4) Enter ticker in quote box Beta? Compare this number to the one found in Yahoo. Are they the same??

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