Objective
By the end of this lesson, you will be able to apply arithmetic concepts to understand and analyze investments in shares.
Materials and Prep
- Paper and pen/pencil
- Calculator
- Access to financial news or stock market websites (optional)
Prior knowledge of basic arithmetic operations (addition, subtraction, multiplication, division) is required for this lesson.
Activities
Research a company of interest to you that is publicly traded. Find out its current share price and the number of shares outstanding.
Calculate the market capitalization of the company by multiplying the share price with the number of shares outstanding.
Explore the concept of dividends. Calculate the dividend payout for a specific company based on its dividend per share and the number of shares you own.
Investigate how to calculate the price-to-earnings (P/E) ratio of a company. Use the company you researched earlier to calculate its P/E ratio.
Practice calculating percentage gains or losses on investments by selecting a few stocks and tracking their performance over a specific time period.
Talking Points
"Investing in shares involves buying ownership in a company."
"Market capitalization is a measure of a company's size and value in the stock market."
"Dividends are a portion of a company's profits distributed to its shareholders."
"The P/E ratio helps investors assess the valuation of a company's stock."
"Percentage gain or loss is calculated by finding the difference between the selling price and the purchase price, and then expressing it as a percentage of the purchase price."