Category Archive Business Ideas

Understanding Common Stockholders’ Equity (Net Worth)

Common Stockholders’ Equity (Net Worth) is the capital supplied by common stockholders — capital stock, paid-in capital, retained earnings, and, occasionally, certain reserves. Paid-in capital is the difference between the stock’s par value and what stockholders paid when they bought newly issued shares. Retained earnings is the portion of the firm’s earnings that have been [...]
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Annual Report Contains Financial Statements and Management’s Opinion

The annual report is a report issued annually by a corporation to its stockholders. It contains basic financial statements, as well as management’s opinion of the past year’s operations and the firm’s future prospects. A firm’s balance sheet is a statement of the firm’s financial position at a specific point in time. It specifically lists [...]
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Techniques of Pricing Options

In the period 1972-73 there was a fateful coincidence. Three developments happened in a short span of time, and together they spawned a revolution in corporate finance. The pressures on corporate financial managers until that time were intensifying, but the events of 1972-73 ratcheted up the intensity. The events began when Black and Scholes published [...]
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