Lauren Hua

How do convertible bonds work?

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Companies wanting to raise capital can issue a product called convertible bonds. In this article we discuss how these products work. Why issue convertible bonds? Companies which are in the initial growth phase may find it hard to obtain financing from lenders due to a poor credit rating. They may issue convertible bonds to investors to raise funds for expansion or a new project. How do convertible bonds work? Convertible bond holders receive regular interest payments with a pre-agreed coupon …

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What does a forward P/E mean?

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A fundamental analyst may use the forward P/E (forward price to earnings )to calculate the value of a stock. This ratio is similar to the P/E (price to earnings) ratio but it uses the projected estimated future earning of the company. Formula The P/E ratio looks to see how expensive a stock is and how much stock investors are willing to pay for each dollar of earnings. A forward P/E does the same thing except it looks at how expensive …

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Listed versus unlisted funds

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Managed funds have recently become very popular due to the automatic diversification they offer. Investors who do not have much experience in investing will also find these products useful as all the investment decision making has been done for them. Managed funds can be listed or unlisted. In this article we discuss the differences between the two. Listed Funds: These are funds which are listed on the Australian stock exchange and traded like shares. The price of listed funds changes …

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What macro factors affect the stock market?

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Fundamental analysis of companies can give us insights into their financial health. Technical analysis can provide an insight into how a stock is trending. However, investors cannot ignore macro factors within the current economic environment.  Some of these factors include economic growth, unemployment, inflation, interest rates, and exchange rates. All of these can affect the stock market. If investors are aware of these factors, they can adjust their portfolio to lessen portfolio losses or maximize profits. Economic growth The economy’s …

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How does the stock market affect the economy

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The stock market can have a significant impact on the economy in several ways. Here are some of the key effects: 1.Earnings for Businesses – Lower stock prices can lead to decreased net wealth for individuals, causing them to tighten their purse strings. This reduced consumer spending can negatively affect businesses, leading to lower profits. – When businesses face a slowdown in consumer spending and reduced profitability, they may find it challenging to expand and grow. This stagnation in business …

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