Calculating Yield to Maturity and Current Yield

Assume the following example: a yearly 6.5% coupon paying bond that matures in 5 years is currently selling for $1,050. The Yield to Maturity (YTM) is 5.3344%, here's how to calculate: Read More

Computing the Value of a Dividend Paying Stock

First, it's important to note that the investment decision process consists of the following components: Read More

A "Put" Option Example

Assume that a stock is currently selling for FMV of $50, and you purchase a put for $2 with a $40 exercise price that expires in three months. Read More

Understanding the PEG Ratio

The Price/Earning to Growth Ratio or the PEG ratio is calculated as (price/earnings ratio) / (earnings growth rate). The PEG ratio is useful because it standardizes P/E ratios for growth. It gives a relative measure of value and facilitates comparing firms with different growth rates. Read More

Calculating the Real Rate of Return

When calculating the real rate of return, follow these steps: Read More