An investor's effective cost to purchase common stock when it is purchased in the form of a convertible security and the investor then exercises the security's conversion option. The market conversion price is calculated by dividing the convertible security's market price by the convertible security's conversion ratio. Examples of convertible securities include convertible bonds, which can be exchanged for shares of a company’' stock, and convertible preferred stock, which can be exchanged for shares of common stock. Collectively, this category of investments is known as "convertibles." Taobiz explains Market Conversion Price When the investor purchases the convertible security, it will often be associated with a conversion ratio that predetermines the number of shares the investor will receive by choosing to convert the security. The conversion ratio will initially value the security for more than the security's current market value, but as market conditions change, so can this relationship.
The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determining a company's size, as opposed to sales or total asset figures. Frequently referred to as "market cap". Taobiz explains Market Capitalization If a company has 35 million shares outstanding, each with a market value of $100, the company's market capitalization is $3.5 billion (35,000,000 x $100 per share). Company size is a basic determinant of asset allocation and risk-return parameters for stocks and stock mutual funds. The term should not be confused with a company's "capitalization," which is a financial statement term that refers to the sum of a company's shareholders' equity plus long-term debt. The stocks of large, medium and small companies are referred to as large-cap, mid-cap, and small-cap, respectively. Investment professionals differ on their exact definitions, but the current approximate categories of market capitalization are: Large Cap: $10 billion plus and include the companies with the largest market capitalization. Mid Cap: $2 billion to $10 billion Small Cap: Less than $2 billion
A rule set by the New York Stock Exchange (NYSE) to determine a minimum market value to be listed continuously. The Market Capitalization Rule states that companies must maintain a minimum value of $25 million over 30 consecutive days to remain listed. This standard value was set in 2004. Taobiz explains Market Capitalization Rule Due to the downturn of the global economy in 2008-2009, the NYSE temporarily amended the market capitalization rule in January of 2009. The minimum value was reduced so that companies who are able to maintain a market value of over $15 million for 30 trading days in a row would remain listed until April 22, 2009.
The percentage of an industry or market's total sales that is earned by a particular company over a specified time period. Market share is calculated by taking the company's sales over the period and dividing it by the total sales of the industry over the same period. This metric is used to give a general idea of the size of a company to its market and its competitors. Taobiz explains Market Share Investors look at market share increases and decreases carefully because they can be a sign of the relative competitiveness of the company's products or services. As the total market for a product or service grows, a company that is maintaining its market share is growing revenues at the same rate as the total market. A company that is growing its market share will be growing its revenues faster than its competitors. Market share increases can allow a company to achieve greater scale in its operations and improve profitability. Companies are always looking to expand their share of the market, in addition to trying to grow the size of the total market by appealing to larger demographics, lowering prices, or through advertising. This calculation is sometimes done over specific countries such as Canada market share or US market share. Investors can obtain market share data from various independent sources (such as trade groups and regulatory bodies), and often from the company itself, although some industries are harder to measure with accuracy than others.
The current price at which an asset or service can be bought or sold. Economic theory contends that the market price converges at a point where the forces of supply and demand meet. Shocks to either the supply side and/or demand side can cause the market price for a good or service to be re-evaluated. Taobiz explains Market Price For example, suppose that the market price for a widget has been $10 for a number of years. Suddenly, the market price shifts to $20 when it is announced that only half of this year's widgets will be sold in stores. In this case, a drop in supply causes the market price to increase. In regard to stocks, the market price of a stock is the most recent price at which the stock was traded. It does not guarantee that an investor will receive the same price upon buying the stock afterward. For example, suppose that a company's stock has been halted from trading because it was planning to release some material news in the next hour. While the market price of the stock at the time will be the last price at which the stock traded, buying the stock when trading resumes will definitely yield a different price.
An investment rating used by analysts when the expectation for a given stock or investment is that it will provide returns in line with those of the S&P 500 or other leading market averages. Market perform is a neutral assessment of a stock and is neither strongly positive or negative. If, however, the stock has gone through a period of market underperformance, it is an indication that the stock is expected to improve its performance relative to market averages. Taobiz explains Market Perform The phrase "market perform" tends to be a fairly lukewarm recommendation overall. A preferred investment vehicle would be one that is expected to outperform, or do better than, leading market averages. A "market perform" rating can be equated to such ratings as "hold" or "peer perform".
A guarantee seal applied to securities, in the process of transfer, by member institutions of the Medallion program. Taobiz explains Medallion Signature Guarantee This Medallion seal certifies that the signature is genuine and has legally binding authority. Furthermore, the guarantor of the seal assumes any financial responsibility associated with the endorsement.
1. In securities analysis, it is the expected value, or mean, of all the likely returns of investments comprising a portfolio. It is also known as "expected return". 2. In capital budgeting, it is the mean value of the probability distribution of possible returns. Taobiz explains Mean Return Mean returns attempt to quantify the relationship between the risk of a portfolio of securities and its return. It assumes that while investors have different risk tolerances, rational investors will always seek the maximum rate of return for every level of acceptable risk. It is the mean, or expected, return that investors try to maximize at each level of risk.