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Internet Exercises
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1

The major stock exchanges are members of the World Federation of Exchanges,found at www.fibv.com. Click on "Members," and select a region and stock exchange.Click on the exchange's symbol to go to the stock exchange's Web site. You can also findlinks to stock exchanges at www.123world.com/stockexchanges. Visit the Web sites ofthree stock exchanges from different continents. Describe their differences and similaritiesand compare them to the Toronto Stock Exchange, /www.tsx.com.
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Do you think that all stock exchanges trade stocks? Check out the HollywoodStock exchange on www.hsx.com. Buy shares in your favourite actors, movies, and musicartists and watch their values rise or fall based on the success of their careers and personallife. Join and play for free. It's 90 percent fun but it will also get you used to some stockmarket jargon. Real stock values are established with "votes," just like on the HSX, butthe votes cost real money.
3

a. Create a list of preferred shares traded on the TSX using the Filter button atwww.globeinvestor.com. Select "Preferred" from the "Security" menu. Find BCE'sSeries A preferred shares, which pays an annual dividend of $1.3625. Use the currentshare price to calculate the expected rate of return on the share.b. Go to http://http://www.cibc.com/ca/investor-relations/share-info/preferred-shares.html.Using Globeinvestor, see if you can match the listed preferred shares of CIBC withtheir trading prices. Using the dividend discount model, calculate the discount ratefor each preferred share.
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Go to www.globeinvestor.com/static/hubs/quotes.html, enter ATY-T, andclick "Go." Click on "Company Snapshot" and find out what the company does and visitits Web site. What type of information is provided to its investors? Repeat for SRF-T compare and contrast the information provided to shareholders.36. Canadian corporate insiders are now required to post their trades atwww.sedi.ca. Visit the site and look up the trading activity of Gerald Schwartz, FrankStronach and Kenneth Thomson, three wealthy Canadian businessmen. Look at the othersorts of information provided at the site. Do you think this information might be of valueto you as an investor? Explain.
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An on-line dividend growth model is available at www.dividenddiscountmodel.com. The "simple model" is the constant dividend growth model and calculates the stockprice as DIV1/(r - g), where DIV1 is "current dividend," r is "discount rate," and g is the dividendgrowth rate and is assumed to equal the "projected EPS growth." The projected EPSgrowth rate provided is based on analysts' forecasts for the next five years. Although stockslisted on U.S. stock exchanges are included in the database, not all have a forecasted EPSgrowth rate. Try out the model for Heinz (HNZ). Value the stock using the simple model,assuming that the discount rate is equal to the expected return shown in the table. Apart fromrounding error, the estimated value should be the same as the current stock price. Calculatethe stock price if investors decided that they required a one-percentage-point higher returnfrom the stock. Change the current dividend to $1, projected EPS growth rate to 5 percent,and use 10 percent discount rate to verify that calculator is working properly.





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