Green Investing
Investment activities that focus on companies or projects that are committed to the conservation of natural resources, the production and discovery of alternative energy sources, the implementation of clean air and water projects, and/or other environmentally conscious business practices.Pure play green investments are those that derive all or most of their revenues and profits from green activities. Green investments can also be made in companies that have other lines of business but are focusing on green-based initiativesor product lines.
Green investing can be accomplished through individual securities or through pooled investment vehicles such as mutual funds or exchange-traded funds. This style of investingis an off shoot of socially conscious investing, but neither type of investing implies investments that are safer than amarket index such as the S&P 500. In fact, investing in"green" companies can be riskier than other equity strategies, as many companies in this arena are in the development stage,with low revenues and high earnings valuations.
Monday, December 31, 2007
Sunday, December 30, 2007
Tuesday, December 11, 2007
Basic and Diluted EPS
Basic and Diluted EPS
EPS = Net Profit / No. of Equity Shares
Basic means that the actual number of common stock shares
in the hands of stockholders is used as the denominator (bottom
number) for calculating EPS. If a business were to issue
more shares, the denominator would become larger and EPS
would decrease. The larger number of shares would dilute
EPS. In fact many business corporations have entered into
contracts that oblige them to issue additional stock shares in
the future. These shares have not yet been issued, but the
business is legally committed to issue more shares in the
future. In other words, there is the potential that the number
of capital stock shares will be inflated and net income will
have to be divided over a larger number of stock shares.
Many public businesses award their high-level managers
stock options that give them the right to buy stock shares at
fixed prices. These fixed purchase prices generally are set
equal to the market price at the time the stock options are
granted. The idea is to give the managers an incentive to
improve the profit performance of the business, which should
drive up the market price of its stock shares. When (and if)
the market value of the stock shares rises, the managers exercise
their rights and buy stock shares at the lower prices fixed
in their option contracts. Managers can make millions of dollars
by exercising their stock options. There is a wealth transfer
from the nonmanagement stockholders to some of the
management stockholders because the market price per share
is lower than it would have been if shares had not been issued
to the managers.
The calculation of basic EPS does not recognize the additional
shares that may be issued when management stock
options are exercised in the future. Also, some businesses
issue convertible bonds and convertible preferred stock that at
the option of the security holders can be traded in for common
stock shares based on predetermined exchange rates.
Conversions of senior securities into shares of common stock
also cause dilution of EPS.
To alert investors to the potential effects of management
stock options and convertible securities, a second EPS is calculated
by public corporations, which is called the diluted
EPS. This lower EPS takes into account the effects on EPS that
would be caused by the issue of additional common stock
shares under terms of management stock option plans and
convertible securities (plus any other commitments a business
has entered into that requires it to issue additional stock
shares in the future). Both basic EPS and diluted EPS (if applicable)
are reported in the income statements of publicly
owned business corporations. The diluted EPS is a more conservative
figure on which to base market value.
EPS = Net Profit / No. of Equity Shares
Basic means that the actual number of common stock shares
in the hands of stockholders is used as the denominator (bottom
number) for calculating EPS. If a business were to issue
more shares, the denominator would become larger and EPS
would decrease. The larger number of shares would dilute
EPS. In fact many business corporations have entered into
contracts that oblige them to issue additional stock shares in
the future. These shares have not yet been issued, but the
business is legally committed to issue more shares in the
future. In other words, there is the potential that the number
of capital stock shares will be inflated and net income will
have to be divided over a larger number of stock shares.
Many public businesses award their high-level managers
stock options that give them the right to buy stock shares at
fixed prices. These fixed purchase prices generally are set
equal to the market price at the time the stock options are
granted. The idea is to give the managers an incentive to
improve the profit performance of the business, which should
drive up the market price of its stock shares. When (and if)
the market value of the stock shares rises, the managers exercise
their rights and buy stock shares at the lower prices fixed
in their option contracts. Managers can make millions of dollars
by exercising their stock options. There is a wealth transfer
from the nonmanagement stockholders to some of the
management stockholders because the market price per share
is lower than it would have been if shares had not been issued
to the managers.
The calculation of basic EPS does not recognize the additional
shares that may be issued when management stock
options are exercised in the future. Also, some businesses
issue convertible bonds and convertible preferred stock that at
the option of the security holders can be traded in for common
stock shares based on predetermined exchange rates.
Conversions of senior securities into shares of common stock
also cause dilution of EPS.
To alert investors to the potential effects of management
stock options and convertible securities, a second EPS is calculated
by public corporations, which is called the diluted
EPS. This lower EPS takes into account the effects on EPS that
would be caused by the issue of additional common stock
shares under terms of management stock option plans and
convertible securities (plus any other commitments a business
has entered into that requires it to issue additional stock
shares in the future). Both basic EPS and diluted EPS (if applicable)
are reported in the income statements of publicly
owned business corporations. The diluted EPS is a more conservative
figure on which to base market value.
Saturday, December 8, 2007
Bank Rate vs Repo Rate
Hello Friemds
Bank Rate:
It is rate at which RBI allows finance to commercial banks. The different types of refinance facilities given by RBI to banks are linked to the Bank Rate. It is a tool used by the RBI for short-term purposes. Any changes in this rate are followed by revision in deposit rates as well as Prime Lending Rate.
Repo Rate
This is one of the credit management tools used by the Reserve Bank to regulate liquidity in countery (customer spending). The bank borrows money from the Reserve Bank to cover its shortfall. The Reserve Bank only makes a certain amount of money available and this determines the repo rate. If the bank requires more money than what is available, this will increase the repo rate - and vice versa
Bank Rate:
It is rate at which RBI allows finance to commercial banks. The different types of refinance facilities given by RBI to banks are linked to the Bank Rate. It is a tool used by the RBI for short-term purposes. Any changes in this rate are followed by revision in deposit rates as well as Prime Lending Rate.
Repo Rate
This is one of the credit management tools used by the Reserve Bank to regulate liquidity in countery (customer spending). The bank borrows money from the Reserve Bank to cover its shortfall. The Reserve Bank only makes a certain amount of money available and this determines the repo rate. If the bank requires more money than what is available, this will increase the repo rate - and vice versa
Friday, November 16, 2007
Forward Deal
Forward Deal
A transaction consisting of a purchase or sale (often of foreign currency) with settlement to occur at a specified future date. Such a transaction will state the specific amount of the asset to be delivered at the specific time, as well as the unit price at which it will be delivered.
A transaction consisting of a purchase or sale (often of foreign currency) with settlement to occur at a specified future date. Such a transaction will state the specific amount of the asset to be delivered at the specific time, as well as the unit price at which it will be delivered.
Assumable Mortgage
Assumable Mortgage
A mortgage that can be transfered with no change in terms. If anassumable mortgage is transferred, the buyer assumes allresponsibility for repayment. The original lender must agree tothe transfer of an assumable mortgage. The seller should receivea written release from the original lender stating that he/she hasno responsibility for further payments. The buyer may have to meetcertain standards to qualify and may be charged an assumption fee.Assumable mortgages can make a property more desirable if interestrates have risen, because the new buyer's payments are at the originalrate. By definition, assumable mortgages cannot have a due-on-saleclause.
A mortgage that can be transfered with no change in terms. If anassumable mortgage is transferred, the buyer assumes allresponsibility for repayment. The original lender must agree tothe transfer of an assumable mortgage. The seller should receivea written release from the original lender stating that he/she hasno responsibility for further payments. The buyer may have to meetcertain standards to qualify and may be charged an assumption fee.Assumable mortgages can make a property more desirable if interestrates have risen, because the new buyer's payments are at the originalrate. By definition, assumable mortgages cannot have a due-on-saleclause.
Agreement among Underwriters
Agreement among Underwriters:-
A contract between members of a syndicate, appointing the originating investment bank as the lead underwriter, defining the members'proportionate liability, and authorizing the manager to allocate unitsto a selling group
A contract between members of a syndicate, appointing the originating investment bank as the lead underwriter, defining the members'proportionate liability, and authorizing the manager to allocate unitsto a selling group
Thursday, November 1, 2007
Alligator Spread
Alligator Spread
A position consisting of a combination of put options and call optionsthat collectively create commissions so high that it is almostimpossible to turn a profit regardless of which direction theunderlier moves. The term originates from the idea of the spread"eating the investor alive.".
A position consisting of a combination of put options and call optionsthat collectively create commissions so high that it is almostimpossible to turn a profit regardless of which direction theunderlier moves. The term originates from the idea of the spread"eating the investor alive.".
Saturday, October 20, 2007
Learn How to Motivate Your Team
Herzberg's Motivators and Hygiene FactorsLearn How to Motivate Your Team
What do people want from their jobs?Do they want just a higher salary? Or do they want security, good relationships with co-workers, opportunities for growth and advancement – or something else altogether?This is an important question, because it's at the root of motivation, the art of engaging with members of your team in such a way that they give their very best performance. The psychologist Fredrick Herzberg asked the same question in the 1950s and 60s as a means of understanding employee satisfaction. He set out to determine the effect of attitude on motivation, by asking people to describe situations where they felt really good, and really bad, about their jobs. What he found was that people who felt good about their jobs gave very different responses from the people who felt bad. These results form the basis of Herzberg's Motivation-Hygiene Theory (sometimes known as Herzberg's Two Factor Theory.) Published in his famous article "One More Time: How do You Motivate Employees", the conclusions he drew were extraordinarily influential, and still form the bedrock of good motivational practice nearly half a century later.Motivation-Hygiene TheoryHerzberg's findings revealed that certain characteristics of a job are consistently related to job satisfaction, while different factors are associated with job dissatisfaction. These are:
Factors for Satisfaction
Achievement
Recognition
The Work itself
Responsibility
Advancement
Growth
Factors for Dissatisfaction
Company Policies
Supervision
Relationship with Supervisor and Peers
Work conditions
Salary
Status
Security
The conclusion he drew is that job satisfaction and job dissatisfaction are not opposites.
The opposite of Satisfaction is No Satisfaction.
The opposite of Dissatisfaction is No Dissatisfaction.
Remedying the causes of dissatisfaction will not create satisfaction. Nor will adding the factors of job satisfaction eliminate job dissatisfaction. If you have a hostile work environment, giving someone a promotion will not make him or her satisfied. If you create a healthy work environment but do not provide members of your team with any of the satisfaction factors, the work they're doing will still not be satisfying. According to Herzberg, the factors leading to job satisfaction are "separate and distinct from those that lead to job dissatisfaction." Therefore, if you set about eliminating dissatisfying job factors you may create peace, but not necessarily enhance performance. This placates your workforce instead of actually motivating them to improve performance.The characteristics associated with job dissatisfaction are called hygiene factors. When these have been adequately met, people will not be dissatisfied nor will they be satisfied. If you want to motivate your team, you then have to focus on satisfaction factors like achievement, recognition, and responsibility.
To apply Herzberg's theory, you need to adopt a two stage process to motivate people. Firstly, you need eliminate the dissatisfactions they're experiencing and, secondly, you need to help them find satisfaction.Step One: Eliminate Job DissatisfactionHerzberg called the causes of dissatisfaction "hygiene factors". To get rid of them, you need to:
Fix poor and obstructive company policies.
Provide effective, supportive and non-intrusive supervision.
Create and support a culture of respect and dignity for all team members.
Ensure that wages are competitive.
Build job status by providing meaningful work for all positions.
Provide job security.
All of these actions help you eliminate job dissatisfaction in your organization. And there's no point trying to motivate people until these issues are out of the way!You can't stop there, though. Remember, just because someone is not dissatisfied, it doesn't mean he or she is satisfied either! Now you have to turn your attention to building job satisfaction.Step Two: Create Conditions for Job SatisfactionTo create satisfaction, Herzberg says you need to address the motivating factors associated with work. He called this "job enrichment". His premise was that every job should be examined to determine how it could be made better and more satisfying for the person doing the work. Things to consider include:
Providing opportunities for achievement.
Recognizing workers' contributions.
Creating work that is rewarding and that matches the skills and abilities of the worker.
Giving as much responsibility to each team member as possible.
Providing opportunities to advance in the company through internal promotions.
Offering training and development opportunities, so that people can pursue the positions they want within the company.
Sources
(http://www.mindtools.com)
What do people want from their jobs?Do they want just a higher salary? Or do they want security, good relationships with co-workers, opportunities for growth and advancement – or something else altogether?This is an important question, because it's at the root of motivation, the art of engaging with members of your team in such a way that they give their very best performance. The psychologist Fredrick Herzberg asked the same question in the 1950s and 60s as a means of understanding employee satisfaction. He set out to determine the effect of attitude on motivation, by asking people to describe situations where they felt really good, and really bad, about their jobs. What he found was that people who felt good about their jobs gave very different responses from the people who felt bad. These results form the basis of Herzberg's Motivation-Hygiene Theory (sometimes known as Herzberg's Two Factor Theory.) Published in his famous article "One More Time: How do You Motivate Employees", the conclusions he drew were extraordinarily influential, and still form the bedrock of good motivational practice nearly half a century later.Motivation-Hygiene TheoryHerzberg's findings revealed that certain characteristics of a job are consistently related to job satisfaction, while different factors are associated with job dissatisfaction. These are:
Factors for Satisfaction
Achievement
Recognition
The Work itself
Responsibility
Advancement
Growth
Factors for Dissatisfaction
Company Policies
Supervision
Relationship with Supervisor and Peers
Work conditions
Salary
Status
Security
The conclusion he drew is that job satisfaction and job dissatisfaction are not opposites.
The opposite of Satisfaction is No Satisfaction.
The opposite of Dissatisfaction is No Dissatisfaction.
Remedying the causes of dissatisfaction will not create satisfaction. Nor will adding the factors of job satisfaction eliminate job dissatisfaction. If you have a hostile work environment, giving someone a promotion will not make him or her satisfied. If you create a healthy work environment but do not provide members of your team with any of the satisfaction factors, the work they're doing will still not be satisfying. According to Herzberg, the factors leading to job satisfaction are "separate and distinct from those that lead to job dissatisfaction." Therefore, if you set about eliminating dissatisfying job factors you may create peace, but not necessarily enhance performance. This placates your workforce instead of actually motivating them to improve performance.The characteristics associated with job dissatisfaction are called hygiene factors. When these have been adequately met, people will not be dissatisfied nor will they be satisfied. If you want to motivate your team, you then have to focus on satisfaction factors like achievement, recognition, and responsibility.
To apply Herzberg's theory, you need to adopt a two stage process to motivate people. Firstly, you need eliminate the dissatisfactions they're experiencing and, secondly, you need to help them find satisfaction.Step One: Eliminate Job DissatisfactionHerzberg called the causes of dissatisfaction "hygiene factors". To get rid of them, you need to:
Fix poor and obstructive company policies.
Provide effective, supportive and non-intrusive supervision.
Create and support a culture of respect and dignity for all team members.
Ensure that wages are competitive.
Build job status by providing meaningful work for all positions.
Provide job security.
All of these actions help you eliminate job dissatisfaction in your organization. And there's no point trying to motivate people until these issues are out of the way!You can't stop there, though. Remember, just because someone is not dissatisfied, it doesn't mean he or she is satisfied either! Now you have to turn your attention to building job satisfaction.Step Two: Create Conditions for Job SatisfactionTo create satisfaction, Herzberg says you need to address the motivating factors associated with work. He called this "job enrichment". His premise was that every job should be examined to determine how it could be made better and more satisfying for the person doing the work. Things to consider include:
Providing opportunities for achievement.
Recognizing workers' contributions.
Creating work that is rewarding and that matches the skills and abilities of the worker.
Giving as much responsibility to each team member as possible.
Providing opportunities to advance in the company through internal promotions.
Offering training and development opportunities, so that people can pursue the positions they want within the company.
Sources
(http://www.mindtools.com)
Friday, October 19, 2007
Law of Demand
The Law of Demand The law of demand states that,
if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded. The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good. As a result, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more. The chart below shows that the curve is a downward slope.
A, B and C are points on the demand curve. Each point on the curve reflects a direct correlation between quantity demanded (Q) and price (P). So, at point A, the quantity demanded will be Q1 and the price will be P1, and so on. The demand relationship curve illustrates the negative relationship between price and quantity demanded. The higher the price of a good the lower the quantity demanded (A), and the lower the price, the more the good will be in demand (C)
if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded. The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good. As a result, people will naturally avoid buying a product that will force them to forgo the consumption of something else they value more. The chart below shows that the curve is a downward slope.
A, B and C are points on the demand curve. Each point on the curve reflects a direct correlation between quantity demanded (Q) and price (P). So, at point A, the quantity demanded will be Q1 and the price will be P1, and so on. The demand relationship curve illustrates the negative relationship between price and quantity demanded. The higher the price of a good the lower the quantity demanded (A), and the lower the price, the more the good will be in demand (C)
Monday, October 15, 2007
Introduction
Hi,
I am starting this blog for MBA Student
For MBA student i will be providing answer to any question from any subjects along with this we all will be discussing case studies also.
I am starting this blog for MBA Student
For MBA student i will be providing answer to any question from any subjects along with this we all will be discussing case studies also.
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