Business Lesson 3

1
How do you make a return from changes in share
prices

• Business Lesson 3
• Demanding celebs
• Aim to understand what affects share prices

2
For starters

• Use the newspapers/magazines youve brought in,
  or the Daq Diary, to list any upcoming celebrity
  events. What celebrities will be involved?
• Extension how do you expect the share price of
  these celebrities will be affected?

3
By the end of today, you will be able to

• explain how changes in demand cause changes in
  price.
• explain how dividends affect demand.
• come up with a trading strategy based on earning
  dividends and capital gains.

4
Remember your mission

• This week well learn one way to accomplish your
  mission to sell shares for more than you buy
  them (called capital gains or day-trading).
• What do you think affects share prices?

To make as much money as possible by investing
imaginary money in celebrity shares.
5
Which would you pay more for?

• An ice cream on
• a cold winter day or
• a hot summer day?
• A Christmas tree on
• December 1st or
• January 1st?
• A bottle of water in
• London or
• the middle of the desert?

6
Demand?

• Demand is the willingness and ability to buy a
  good or a service.
• If demand for a share decreases, what will happen
  to its price?
• Extension research how supply affects the price
  of goods and services, and how this relates to
  Celebdaq (hint share supply does not change once
  shares are issued).

7
Many factors affect demand

• The most important one is the share dividend.
• Remember, dividends are paid out every Friday on
  each share you own.
• The ideal celebrity offers a high dividend at a
  low price.

8
Reaping the dividends

• The relationship between dividend and price is
  called the dividend yield.
• Do you think investors prefer high or low
  dividend yields? Why?
• A useful hint find out about potential dividends!

Dividend yield dividend price 100
9
If a celebritys press coverage increases

• Is the dividend the only thing which affects
  demand?

10
Extension activity/homework

• Complete the worksheet on demand. This will help
  you make dividends and capital gains!

11
Invest!

• Choose the 3 celebrities that you expect will
  bring in the biggest capital gains and dividends
  during the week.

12
Celebwork
Track one of your investments. Cut out/print any
news stories about them during the week and bring
these in next lesson.