NISM Series XV : Research Analyst Certification Exam Notes

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  • Dividend Yield = Dividend per share (DPS) / Current price of stock
  • Earning Yield = Earnings Per Share (EPS) / Current price of stock
  • The reverse of Earning Yield is the popularly known Price to Earnings Ratio which can be defined as: Price to Earnings Ratio = Current price of stock/ Earnings Per Share (EPS)
  • PEG ratio is defined as: Growth adjusted Price to Earnings Ratio = [Current Price of Stock / Earnings Per Share] / Growth rate PEG Ratio was the term coined by Peter Lynch, a savvy investor and fund manager.
  • For a buyer of the entire business, what matters is the value of the entire firm or what he would have to pay to take over the entire business including value of equity and value of debt. This is called Enterprise Value (EV) and it considers the value of the equity and the debt as debt becomes the liability of the acquirer on acquisition of 100% equity. It is calculated as: Enterprise value = Market value of equity (Market capitalization) + Market value of debt - cash and cash equivalents

NISM RESEARCH ANALYST

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