Stocks and Bonds

These are
some ways
for the
companies
to grow.
 Stocks: A form of equity
financing or raising money Stock certificate: a paper
by allowing investor to be
part owners of the company. issued to a shareholder which
shows on its face the number
of shares it represents.
Stockholders or shareholders: Investors who
buy the shares of the corporation

Dividend: earnings distributed to shareholders

of a corporation
Stock certificate: a paper
issued to a shareholder which
shows on its face the number
of shares it represents.
Certificate number: an
accession number or
placeholder to keep track of
the number of certificates
Par Value: the face value of a
stock.

No-par stock: stock issued

without a stated value on the
certificate.
 Market price: the price at
which a stock is sold.

Preferred Stock: type of stock for which stockholders get first

choice in distributed profits.
Common Stock: the ordinary stock of a corporation, paying no
specified rate or amount of dividend
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800
Stock: gives the
116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382
company name
0
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
0
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600

31.6 23.5 East West 25.6 25.6 25.35 25.4 82400

5
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800
52-wk-high: gives
116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382
the highest price
0
at which a
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
0
company stock
traded during the
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600
past 52 weeks.
31.6 23.5 East West 25.6 25.6 25.35 25.4 82400
5
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800

116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382

52-wk-low: gives
0
the lowest price
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
0
at which the
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600
company stock
traded during the
31.6 23.5 East West 25.6 25.6 25.35 25.4 82400 past 52 weeks.
5
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800

116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382

Open: stands for
0
the opening price
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
0
at which the stock
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600
traded yesterday.

31.6 23.5 East West 25.6 25.6 25.35 25.4 82400

5
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800

116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382

Close: stands for
0
the price at which
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
0
shares of the
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600
company traded
when the stock
31.6 23.5 East West 25.6 25.6 25.35 25.4 82400 exchange closed
5 yesterday
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800

116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382

High: refers to the
0
highest price at
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
0
which the stock
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600
traded yesterday.

31.6 23.5 East West 25.6 25.6 25.35 25.4 82400

5
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW Low: refers to the
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800 lowest price at
which the stock
116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382 traded yesterday.
0
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047 Volume: refers to
0 sales volume
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600

31.6 23.5 East West 25.6 25.6 25.35 25.4 82400

5
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

Give the difference of
WK- WK- E E
HG LOW
the highest and
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800 lowest prices for the
past 52 weeks of
116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382 “CHIB” :
0
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
0
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600 57.19 - 45.8 = 11.39

31.6 23.5 East West 25.6 25.6 25.35 25.4 82400

5
 READING THE STOCK TABLE

52 – 52 – STOCK OPEN HIGH LOW CLOS VOLUM

WK- WK- E E
HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800 What percentage of
the 52 wk low is the
116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382 difference of the
0 highest and lowest
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047 prices for “CHIB”
0 shares yesterday?
57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600
47.5 – 47 = .5/45.8 = 1.1%
31.6 23.5 East West 25.6 25.6 25.35 25.4 82400
5
 bid Ask/offer
size price price size
122 354,100 21.60 21.80 20000 1
9 81700 21.55 21.90 183500 4
42 456500 21.500 22.15 5100 1

Bid size: the number of individual buy orders and the total number of shares they wish to buy.
Bid price: the price these buyers are willing to pay for the stock
Ask price: the price the sellers of the stock are willing to sell the stock
Ask size: how many individual sell orders have been placed in the online platform and the total
number of shares the sellers wish to sell
 bid offer
size price price size
122 354,100 21.60 21.80 20000 1
9 81700 21.55 21.90 183500 4
42 456500 21.500 22.15 5100 1

Bid size: the number of individual buy orders and the total number of shares they wish to buy.
Bid price: the price these buyers are willing to pay for the stock
Ask price: the price the sellers of the stock are willing to sell the stock
Ask size: how many individual sell orders have been placed in the online platform and the total
number of shares the sellers wish to sell
Formula 1:
Total cost of Stock: Total Market Price + Commission

Example: Ghie bought 100 shares of paper Mill stock at

150 php per share. The broker charged her 750 php
commission. Find the total cost of the stock.

Example: Anne bought 1/5 % of the 56000 stocks of BPI

at the 52 wk low. If the broker received an 8 %
commission, how much is the total cost of the stocks?
Dividends
The income the stockholder
Formula 2:
receives from his investment is
the amount of dividend he Total dividend = no. of stocks * dividend per share

gets.

Example: A certain financial institution

declared a P30,000,000 dividend for the
common stocks. If there are a total of
700,000 shares of common stock, how
much is the dividend per share?
Dividends
The income the stockholder
Formula 2:
receives from his investment is
the amount of dividend he Total dividend = no. of stocks * dividend per share

gets.

Example: Find the yearly income Mr.

Reyes will receive from an investment in
1000 shares of ABC stock if a dividend of
14.80 per share is paid quarterly.
Dividends
The income the stockholder
Formula 2:
receives from his investment is
the amount of dividend he Total dividend = no. of stocks * dividend per share

gets.

Example: Ramon owns 75 shares of a

company common stock with a par value
of P400.00. If the corporation declares a
dividend per share of 7 ¼ % of the par
value, what is the total dividend that 2175.00
Ramon should get?
 SELLING STOCKS

Formula:
Market price – Expenses = Net proceeds of selling stocks
Where Market price = no. of shares X Selling price

Example: If you bought 500 shares of East 52 –

WK-
52 –
WK-
STOCK OPEN HIGH LOW CLOS
E
VOLUM
E
West Banking Corp. stock at the 52-Week HG LOW
75.3 68 ASIA UNITED BANK CORP 70 70 69.4 70 30800
Low and sold at the 52-Week high
a. How much money did you make on this 116 82 BDO UNIBANK INC 114.2 114.9 113.3 114.3 506382
transaction (Ignoring dividends)? 0
101.8 84.5 BPI 99.8 100.5 98.45 100.5 309047
b. Find the broker’s commission if the 0
broker charges 2 % of the total sale price. 57.19 45.8 CHINA BANK CORP 47.5 47.5 47 47.35 45600
c. What amount represents your Net
proceeds? 31.6 23.5
5
East West 25.6 25.6 25.35 25.4 82400
Consideration when you want to invest on stocks

Efficient market theory:

Developed by Eugene Fama
States that the Stock Market reacts very fast to any information.
Thus, stock prices are accurate.
1. Ghie paid a total of 96,600 php for buying 1/8 % of the
stocks of the Jollibee Inc. The broker charged her a 5 %
commission of the total market price. How many stocks
does the Jollibee Inc. have if each of its stocks costs 125 3. ABC corporation has issued
php? 40,000 shares and Mr. Nowell
owns ¼ % of these. If the total
2.Ben bought shares 1/40 % of 100000 stocks of Alaw dividend of Mr. Nowell is 1,720
Company at 54.602 php. After some time, he decided to php and the par value is 212
sell these stocks for a certain amount that will just put php, what percent of the par
him in a breakeven scenario. If the amount charged by value represents the amount
the broker is 8 % of the market price, what amount did of the dividend?
Ben sell these stocks?
Bonds: a form of long-term promissory note issued by
a corporation or government in exchange for a sum of
money.

Lower risk but lower yield Government Bonds: a bond issued by

governments to fund programs,
deliver payrolls, and pay bills.
Bond holder: one who holds a
corporation or government bond
 Bonds: a form of long-term promissory note issued by
a corporation or government in exchange for a sum of
money.

Two kinds of values:

Lower risk but lower yield
Par value à Face value
Market value à price at which the bond is being sold
Bond holder: one who holds a
- If Market Value > Par value, then the bond is selling at a
corporation or government bond premium
- If Par value < Market value, then the bond is selling at a
discount
- Market price: PAR VALUE X Rate
“ Note: “95” means 95 %”
Two kinds of values:
Par value à Face value
Market value à price at which the bond is being sold
- If Market Value > Par value, then the bond is selling at a
premium
- If Par value < Market value, then the bond is selling at a
discount
- Market price: PAR VALUE X Rate
“ Note: “95” means 95 %”
Example:
Find the market price of 0ne P1,000 bond
at each quoted price
96 à
101 ¾ à
 Total investment = market price X number of bonds

51500
Example 1: Ms. Johanna bought fifty P1,000 ACTS
bonds at 103. What is her total investment in ACTS
bonds? 4650 php.

Example 2: John Alfonso bought 5 P1000 MACQUE

OUTBACK CORP BONDS at 92 plus P10.00 commision
per bond through a broker. What is John’s total
investment?
 Bond income
Interest = total cost of the par value X rate X time

Example: Mr. Santos owns 45 bonds with a par value of P1,000 each and pays 8.5% interest. What
annual income does MR. Santos get from these bonds?

3825 php
Rate of income or yield
Ratio of Annual Income to the investment
Example: Find the yield on P1000, 9 % ACTS bond
priced at 94 plus 10 commission
Considerations:
1. Price of the bond
2. Interest rate
3. Whether the bonds can or cannot be resold
4. The earnings record of the issuer
5. The credit history of the issuer
6. The business condition