Level I Equity

Free Cash Flow to Equity (FCFE)

The idea of free cash flow is fairly straightforward: it’s cash flow that a company may use in any way it chooses (within reason, of course; for example, we’ll consider only legal uses here).  There are several types of (and, consequently, definitions for) free cash flow.  In this article, I’ll describe one of those: free […]

CFA® Level I Membership, CFA® Level I Financial Reporting and Analysis (FRA) Membership

This will give you access to this and all other articles at that membership level.

Free Cash Flow to the Firm (FCFF)

The idea of free cash flow is fairly straightforward: it’s cash flow that a company may use in any way it chooses (within reason, of course; for example, we’ll consider only legal uses here).  There are several types of (and, consequently, definitions for) free cash flow.  In this article, I’ll describe one of those: free […]

CFA® Level I Membership, CFA® Level I Financial Reporting and Analysis (FRA) Membership

This will give you access to this and all other articles at that membership level.

Equity Indices

An equity index is nothing more nor less than a hypothetical stock portfolio.  The index pretends to invest in a bunch of stocks, and tracks their performance over time.  It’s the sort of thing that you may have done in a high school economics or history class.  I did, at least. I don’t intend to […]

CFA® Level I Membership

This will give you access to this and all other articles at that membership level.

Margin Call Price

The price at which you will receive a margin call on a long position in a stock is given by: $margin\ call\ price\ =\ P_0\left(\frac{1\ –\ initial\ margin}{1\ –\ maintenance\ margin}\right)$ where: $P_0$: initial price of the stock The price at which you will receive a margin call on a short position in a stock […]