Mong Kok Ltd Financials: Translated Accounts Analysis
Mong Kok Ltd: Translated Accounts as at 30 June 2018
| HK$ | Exchange Rate | A$ | |
|---|---|---|---|
| Sales | 595,000 | 0.85 | 505,750 |
| Cost of Sales | 400,000 | 0.85 | 340,000 |
| 195,000 | 165,750 | ||
| Expenses | 100,000 | 0.85 | 85,000 |
| 95,000 | 80,750 | ||
| Tax Expense | 20,000 | 0.85 | 17,000 |
| Profit for the Period | 75,000 | 63,750 | |
| Retained Earnings (1/7/17) | 450,000 | 366,000 | |
| 525,000 | 429,750 | ||
| Dividend Paid | 25,000 | 0.80 | 20,000 |
| Retained Earnings (30/6/18) | 500,000 | 409,750 | |
| Share Capital | 200,000 | 0.80 | 160,000 |
| General Reserve | 100,000 | 0.80 | 80,000 |
| FCTR | (25,750) | ||
| 800,000 | 624,000 | ||
| Current Assets | 250,000 | 0.78 | 195,000 |
| Property, Plant & |
Stock Market Anomalies: Value, Size, and Momentum
Cross-Section Predictability of Stock Returns
Ideally, all securities should have equal expected risk-adjusted returns, eliminating any alpha (α). However, empirical studies have identified several cross-sectional anomalies, including the value premium, size effect, and momentum. These anomalies result in the formation of groups of stocks with different average returns.
Predictability of returns?
- Yes: Behavioral finance-based explanations.
- No: The asset-pricing model used is misspecified.
Investment
Read MoreUnderstanding Option Greeks: Delta, Gamma, Theta, Vega, Rho
What Can Greek Options Do for You?
Armed with Greeks, an options trader can make more informed decisions about which options to trade and when to trade them. Consider some of the things Greeks may help you do:
- Gauge the likelihood that an option you’re considering will expire in the money (Delta).
- Estimate how much the Delta will change when the stock price changes (Gamma).
- Get a feel for how much value your option might lose each day as it approaches expiration (Theta).
- Understand how sensitive an option
Dividend Policy Calculations and Share Repurchase Strategies
Share Repurchase Impact: How many outstanding shares will there be if DividendsActivity SA dedicates the same amount as dividends, with a 5% dividend yield, to repurchase shares in the Stock Exchange Market?
Formula: ((Common Stock / CS Price per Share)) – ((Payout % * Net Income) / Today’s Price per Share))
Payout for 3% Dividend Yield: Calculate the payout required to provide a dividend yield of 3%.
Formula: ((Div.Yield % * Today’s Price per Share * (Common Stock / CS Price per Share)) / Net Income)
Read MoreTrading, Investment Companies, and Derivatives: A Comprehensive Analysis
Lecture 16: Trading Mechanics and Costs
Trading Commissions: Discount brokerages profit from Payment for Order Flow (PFOF) and asset management products (explicit). PFOF: Customer to broker, broker sends to wholesaler who gets a fee, wholesaler provides best execution back to broker to customer.
Spread: Difference between bid (buy) and ask (sell) price (implicit).
- Investors sell at the bid and buy at the ask.
- Transaction cost for investors, source of profit for market makers (e.g., dealers).
Some trades
Read MoreFinancial Assets, Markets, and Portfolio Management
Financial Assets and Derivatives
Asset: An asset is any object, tangible or intangible, that holds value for its owner.
Derivative: A derivative is a financial security whose value is derived from an underlying asset or group of assets.
Valuation Concepts
Capitalize: Estimate Future Values. Discount: Estimate Present Values.
Effective Annual Rate
The effective annual rate is the rate expressed on an annual basis, taking into account compounding interest.