capital market

Examples of capital market in the following topics:

• Performance per Share

  • P/E Ratio = Market Price Per Share / Annual Earnings Per Share .
  • The dividend yield or the dividend-price ratio of a share is the company's total annual dividend payments divided by its market capitalization—or the dividend per share, divided by the price per share.
  • However, investors seeking capital growth may prefer a lower payout ratio, because capital gains are taxed at a lower rate.
  • Market To Book ratio is used to compare a company's current market price to its book value.
  • In the first method, the company's market capitalization can be divided by the company's total book value from its balance sheet (Market Capitalization / Total Book Value).

• Ethical Barriers

  • Capital markets involve the raising and investing money in various enterprises.
  • Although some argue that the increasing integration of these financial markets between countries leads to more consistent and seamless trading practices, others point out that capital flows tend to favor the capital owners more than any other group.
  • Likewise, owners and workers in specific sectors in capital-exporting countries bear much of the burden of adjusting to increased movement of capital.
  • The economic strains and eventual hardships that result from these conditions lead to political divisions about whether or not to encourage or increase integration of international trade markets.
  • The anti-globalization movement is a worldwide activist movement that is critical of the globalization of capitalism.

• The Imperative of Liquidity

  • If I have capital, I can spend it.
  • Cash flows must take into account not only amounts of capital, but the time value and availability of said capital.
  • The difficulty in taking a certain asset to market, and recovering capital without incurring a loss of value, is called liquidity risk.
  • Inflation generally devalues any cash asset, and investing capital into money markets can generate interest.
  • Consider the concept of liquidity as it pertains to an organization's available cash flow and overall ability to capture opportunities in the market

• Free Enterprise

  • Political scientist Ian Bremmer describes China as the primary driver for the rise of state capitalism as a challenge to the free market economies of the developed world, particularly in the aftermath of the 2008 financial crisis.
  • In all three cases, the state is using markets to create wealth that can be directed as political officials see fit.
  • This is a form of capitalism but one in which the state acts as the dominant economic player and uses markets primarily for political gain. "
  • Some have also used the term as a synonym for competitive markets, wage labor, capital accumulation, voluntary exchange, and personal finance.
  • There are multiple variants of capitalism, including laissez faire, mixed economy, and state capitalism.

• Inadequate or incorrect marketing, cooperation, finance, or HR strategies

  • The first group of flawed growth strategies is marketing strategies.
  • If a firm does not conduct market research, identify customer preferences, generate new customer wishes, or segment or capture the market, it will not grow.
  • The only alternative that remains is seeking outside capital.
  • In addition, start-ups with high growth potential in certain industries, can trade partial ownership in their firms for "venture capital".
  • Start-ups can also make another growth mistake in financing by launching their IPOs on the stock market too soon and simply using this revenue to repay debt or venture capital and replace it with equity from the capital market.

• Equity Finance

  • The equity, or capital stock (or stock) of a business entity represents the original capital paid into or invested in the business by its founders.
  • Firms need to acquire capital from others to operate and grow.
  • From a firm's perspective, they must pay for the capital it obtains from others, which is called its cost of capital.
  • While a firm's present cost of debt is relatively easy to determine from observation of interest rates in the capital markets, its current cost of equity is unobservable and must be estimated.
  • If an investment's risk increases, capital providers demand higher returns or they will place their capital elsewhere.

• Commercial Banks

  • Commercial banks are financial institutions that focus on enabling the exchange of capital and currency via a variety of services.
  • Enabling bank accounts, used to store, exchange, send, and receive capital electronically (generally via the internet)
  • Raising capital (i.e.
  • IPOs and other forms of commercial capital raising)
  • Market Risk – Virtually any capital asset has a market, and is therefore subjected to the risks of it's respective market.

• Return on Investment

  • Return on investment (ROI) is one way of considering profits in relation to capital invested.
  • Return on assets (ROA), return on net assets (RONA), return on capital (ROC) and return on invested capital (ROIC) are similar measures with variations on how 'investment' is defined .
  • Marketing not only influences net profits but also can affect investment levels too.
  • Marketing decisions have obvious potential connection to the numerator of ROI (profits), but these same decisions often influence asset usage and capital requirements (for example, receivables and inventories).
  • Marketers should understand the position of their company and the returns expected.

• Principles of Organization Design

  • The design of an organization is the manifestation of its cultural philosophy, its go-to-market strategy, and its goals and aspirations.
  • This phase of the process requires a thorough market analysis that assesses viable business opportunities, key market and economic trends, competitive positioning, and knowledge of the customer needs and motivators.
  • Staffing or human capital management has become increasingly important as it now represents a potential competitive advantage in the global economy.
  • Good human capital management includes programs that best align individuals with organizational processes and expectations.
  • This includes having a continuity planning program that ensures that internal fluctuations in talent availability do not affect the delivery of high-quality programs and services in market.

• Capitalism in the U.S.

  • Democratic capitalism is a political, economic, and social system with a market-based economy that is largely based on a democratic political system.
  • Democratic capitalism, also known as capitalist democracy, is a political, economic, and social system and ideology based on a tripartite arrangement of a market-based economy that is based predominantly on a democratic polity.
  • The three pillars include economic incentives through free markets, fiscal responsibility, and a liberal moral-cultural system, which encourages pluralism.
  • This economic system supports a capitalist, free-market economy subject to control by a democratic political system that is supported by the majority.
  • Singapore, which maintains a highly open market economy and attracts lots of foreign investment, does not protect civil liberties such as freedom of speech and expression.