November 30, 2007

Introduction to Equity

Objectives:
By the end of the course, the participants

will be able to:

  • Understand the features and characteristics of equity
  • Discuss how the equity markets operate
  • Develop understanding of equity market participants
  • Identify the different equity products
  • Understand different valuation methods (overview)

Session 1: Introduction to Equity Markets

By the end of the session the course participant will be able to:

  • Understand the difference between primary and secondary markets
  • Identify the market participants (differentiate between the Buy and Sell sides)
    • Issuers
    • Investors
      • Asset managers
      • Money Mangers
      • Insurance companies
      • Institutional clients
    • Custodians
  • Differentiate between New York Stock exchange and NASDAQ
  • Understand the differences between Common Stock and Preferred Shares
  • Explain rights and warrants
  • Distinguish between global versus domestic stocks
  • Classify large cap versus small cap stocks
  • Define Exchange Traded Funds (ETFs)
  • Conceptually picture the size of the market
  • Differentiate between
    • Debt and equity
  • Differentiate between buy and sell side

Session 2: Equity Securities Valuation: Fundamental Analysis

By the end of the session the course participant will be able to:

  • Differentiate between bottom up and top down approaches
  • Discuss the different ratios
    • P/E Ratio (PE)
    • Price/Book (P/BV)
    • Price/Cash Flow (P/CF)
    • Price/Sales (P/Sales)
    • Dividend Yield (DY)

 

Session 3: Equity Pricing Models

By the end of the session the course participant will be able to:

  • Define risk
  • Discuss risk free rates and risk premium
  • Understand beta
  • Understand Dividend Discount Model (DDM)
  • Discuss Return on Equity (ROE)
  • Understand Comparable Analysis (Comps)