Join Rudolph Rosenberg for an in-depth discussion in this video Example one: Invest in a company, part of Making Investment Decisions.
…For our first real life example of the evaluation of…an investment decision, let's look into the investment in a company.…You can either invest in a publicly traded company by buying stock…on the stock exchange, or you can invest in a smaller, private company.…It has not yet reached the point of…being publicly traded, but in which you strongly believe.…When I say strongly believe, I mean that you…not only believe in the product, or in the strategy.…But also that you have done some research that make…you believe that you would be making a positive return.…
Whether you invest in a publicly traded company or in a small private…company, you will be looking to make money essentially in the same way.…When investing in a company, you gain access…to two types of revenues from that company.…The first one is called dividends, it is…the end of year profits generated by the company,…that can be attributed to the shareholders.…At the end of the year, those profits are split between…the shareholders based on the number of shares that they possess.…
This course teaches the net present value (NPV) methodology, an investment evaluation formula used by countless publicly traded companies and financial analysts, in a way that makes it accessible and applicable to you—no finance background required. Rudolph Rosenberg explains what investments are, how they are measured, and what makes a good investment. Then he explores the NPV formula in depth, showing you how to evaluate your cash flows, choose a rate of return, and assess the risk of a particular investment. This all culminates in a look at how the principles of investment apply to three real-life scenarios that any individual or company might encounter.
- What is an investment?
- Understanding ROI
- What makes a good investment?
- Using the NPV formula
- Assessing risk
- Applying NPV to real-life situations