About This Chapter
Equity Investments - Chapter Summary
If you are interested in strengthening your knowledge of equity investments or want to study this subject for the first time, you've reached the right place! This engaging chapter offers access to bite-sized lessons you can view any time to better understand the stock market, equity valuation, inactively traded securities and more. After reviewing the lessons, you will have the knowledge to:
- Share the pros and cons of equity financing
- Describe and calculate total equity
- Discuss investment bankers and securities markets
- Define and describe the valuation process for individual equity securities
- Calculate the return on equity
- Share examples of fundamental analysis
- Provide the definitions of closely held companies
- Identify benchmarks and describe management strategies for equity portfolios
All the lessons in this chapter are available around-the-clock and can be viewed using any computer, smartphone or tablet with an Internet connection. This flexibility enables you to study the basics of equity investments whenever and wherever your schedule permits. Before, during or after viewing the lessons, check your understanding of the concepts they cover by taking multiple-choice quizzes. A practice exam can check your overall comprehension of this chapter.
1. What Is Equity Financing? - Definition, Pros, Cons & Examples
Equity financing is as necessary to a business as air is to a person, but because it comes in several forms, it can easily be misunderstood. This article explains the various types of equity financing and explores their advantages and disadvantages for both companies and investors.
2. Calculating Total Equity: Definition & Formula
Equity is important to owners and investors of a business. In this lesson, you'll learn what total equity is, how to calculate it, and how it fits into the overall financial picture of a business. A short quiz follows.
3. Stock Market: Definition & Indices
Understanding what the stock market is and how indices summarize the market are essential pieces of knowledge for an investor. Let's take a look at what these terms mean and how investors apply these concepts.
4. Securities Markets and Investment Bankers
Securities markets and investment banks provide opportunities for companies to obtain capital and people to make investments to increase their wealth. In this lesson, you'll learn about securities markets and the players involved.
5. Equity Valuation: Definition & Process
This lesson includes an overview of equity valuation process. You will learn about the basic steps to follow to find the fair value of a company's equity shares.
6. How to Calculate the Return on Equity: Definition, Formula & Example
After watching this video lesson, you will learn how the return on equity helps you as a potential investor determine whether a certain company is worth investing in or not. You'll also learn how companies perform this calculation.
7. Fundamental Analysis: Definition & Examples
In this lesson you will learn what Fundamental Analysis is, how its used to evaluate shares in a company, and what pieces of information are used to complete that evaluation.
8. Closely Held Companies & Inactively Traded Securities
In this lesson, we will define and discuss closely held companies. We'll explain why they often lead to inactively traded securities, and then conclude by discussing the implications of having shares infrequently traded.
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Other chapters within the Chartered Financial Analyst (CFA): Exam Prep & Study Guide course
- About the CFA Exam
- Ethical & Professional Standards in Finance
- Quantitative Methods in Finance
- Overview of Economics in the Financial Market
- Domestic Economic Concepts
- International Trade & Currency Exchange
- Overview of Financial Reporting & Analysis
- Types of Financial Reporting & Analysis
- Understanding Corporate Finance
- Fixed-Income Securities
- Derivatives in Finance
- Alternative Investments
- Overview of Portfolios
- Portfolio Management Strategies
- Portfolio Performance Analysis