Question.3251 - Stock Valuation
Answer Below:
ldquo xxxxxxxxx is xxxxxxxx as xxx first xxxx toward xxxxxxxxxxx investing xxxxx Valuation xx simple xxxxx means xxxxxxxxxxx the xxxxx of xxx asset xx on xxxx which xxxxx the xxxxx of xx asset xxxxx from xxx point xx view xx investor xxxxxxxxx stock xxxxxxxxx is xxxxxxxxxxx the xxxxxxxxx market xxxxx of xxxxxxxxxx stocks xx companies xx doubt xx is xx integral xxxx of xxx financial xxxxx especially xxx the xxxx who xxxxx invest xxxxxxxxx in xxxxxx In xxx view xxx John xxxxxxx Keynes xxxxx stock xxxxxxxxx is xxx a xxxxxxxxxx but x convention xxxxx serves xx facilitate xxxxxxxxxx and xxxxxx that xxxxxx are xxxxxx despite xxxxx underpinned xx an xxxxxxxx business xxx its xxxxxxxx investments xxxx as xxxxxxxxx rdquo xx this xxxxx we xxxxx study xxx models xx which xxx valuation xxxxxxxxxxx is xxxxxxxxx and xxx methods xxx each xx them xxxxxxxxx Methodology xxx Methods xxxxxxxxx methodology xxx be xxxxxxxxxx into x Absolute xxxxxxxxx Methodology x Relative xxxxxxxxx Methodology xx the xxxxxx one xxx focus xxxx on xxxxxxxxxxx the xxxxxxxxx value xx an xxxxxxxxxx ndash xxxxx determining xxx fundamental xxxxx of xxx stock xxxxx on xxx data xxxxxxxx by xxx company xxxxx the xxxxx is xxxx focussed xx determining xxx value xx the xxxxx based xx the xxxxxxxx standard xxxxxxxxx ratios xxxxx Relative xxx also xxxxxx as xxxxxxxxxx methods xxx in xxxxxxxx methodology xxx value xx stocks xx other xxxxxx is xxxxx upon xxx discounted xxxxx of xxxxx expected xxxxxx cash xxxxx Absolute xxxxxxxxx Methodology xxxxxxxx the xxxx widely xxxx dividend xxxxxxxx model xxx the xxxxxxxxxx cash xxxx method xxxxx the xxxxxxxx valuation xxxxxxxxxxx includes xx price xx earnings xxxxx price xx book xxxxx ratio xxxxx to xxxxx ratio xxx price xx cash xxxx ratio xxxxx the xxxx common xxxx a xxxxxxxx discount xxxxxx DDM xxxxx things xxxxx -dividend xxxxxxxx method xx valid xxxx for xxxxx companies xxxxx have x history xx paying xxxxxxxxx to xxxxx shareholders xxx most xxxxxxxxxxxx model xxxxxxxxxx the xxxxx of xxx share xxxxx on xxx dividends xx pays xx its xxxxxxxxxxx The xxxxxxx lies xxxx any xxxx is xxxxx to xxx present xxxxx of xxx forecasted xxxxxxxxx it xx about xx pay xx its xxxxxxxxxxxx The xxxxxxxx used xxx this xxxxx is x D xxx Where x Price xx the xxxxx D xxxxxxxx dividend xxx the xxxx year x Discount xxxx G xxxxxx rate xx dividends xxxxxxx ABC xxxxxxx pays x dividend xx annually xxx required xxxx of xxxxxx stands xx and xxx growth xxxx of xxxxxxxxx is xxxxx of xxx stock xx per xxx - xxxxxx to xxxxxxxx DDM xxxxxx cannot xx used xxx companies xxxxx do xxx pay xxxxxxxx DDM xxxxxx be xxxx when xxx rate xx return xx lower xxxx the xxxx of xxxxxx rate xx dividends xxx can xxxxxxx be xxxxxxxxxx into xxxxxx stage xxxxxxxx model xxxxx stage xxxxxxxx model xxxxx dividends xxx higher xx lower xxx a xxxxxxxxxx period xxx then xxxxxx stagnant x Discounted xxxx flow xxxxxx DCF xxxxx the xxxxxxx behind xxxx the xxxx as xxxxxxxx discount xxxxx the xxxxxxx which xxxxxx here xxx cash xxxxx instead xx dividends xx this xxxxx the xxxxx of xxx stock xx determined xx discounting xxx forecasted xxxx flows xx the xxxxxxx at x discount xxxx to xxx the xxxxxxx value xx them xxxxxxx to xxx DCF xx also xxx most xxxx valuation xxxxxxxxxxx for xxxxxxxxxxx price xx a xxxxx Key xxxxxxxxxx of xxx DCF xxxxxxxxx includes xxxx Cash xxxx Terminal xxxxx Value xx the xxx of xxx Free xxxx flow xxxxxxxxxx period xxx the xxxxxxxx Rate xxxxxx further xx the xxxxxxxx Valuation xxxxxxxxxxxxx as xxxxxxxxx above xxxxx ratios xxx industry xxxxxxxxxx to xxxxxxxxxx or xxxxxxxxx the xxxxx of xxx stock xxxxxxxx Valuation xxxxx rsquo x find xxx intrinsic xxxxx as xx the xxxxxxxx valuation xxxxxxx rather xx focuses xx the xxxxxxxxxx of xxxxx rsquo x price xxxxxxxxx to xxxxxxxxxx benchmark xxxxxx behind xxxx two xxxxxxx asset xxxxxx has xxxxxxx values xxxx is xxxxx referred xx ldquo xxx of xxx Price xxxxx The xxxx common xxxx are xxxxxxxxx below x Price xx earnings xxxxx To xxxxxxxxx this xxxxxx we xxxx to xxxxxx the xxxxx by xxx earnings xxx of xxx company xxxx ratio xxxxx us xxx much xx investor xx willing xx pay xxx per xxxxxx of xxxxxxxx For xxxxxxx if x company xxxx trading xx a x E xxxxx of xxxxx the xxxxxxxx is xxxxxxx to xxx for xx its xxxxxxxx We xxxx to xxxxxx that xxxx valuation xxxxxx is xxx valid xxx companies xxxxx do xxx have xxxxxxxx or xxxxxxxx earnings x Price xx book xxxxx ratio xxxx we xxxxxx the xxxxx by xxx book xxxxx of xxx asset xxxxx asset xxxxx intangible xxxxxx and xxxxxxxxxxx Similar xx P x multiple xxxx ratio xxxx book xxxxx of xxx comparable xxxxxx to xxxxx the xxxxx for xxxxxxxxx stock xx is xxxxxxxx a xxxxx of xxxxxx value xx equity xx the xxxx value xx equity x Price xx sales xxxxx Another xxxxxxxxxxx where xxxxxx are xxxxxxx by xxx sales xxxxxx The xxxxx is xxxxxxxxxx by xxxxxxxx the xxxxxxx amp x market xxx by xxx sales xxxxxxx in xxx latest xxxx The xxxxx mentioned xxxxx rsquo x can xx read xx different xxx different xxxxxxxxxx While x P x ratio xx can xx high xxx one xxxxxxx it xxx be xxxxxxxxxx lower xxx another xxxxxxx It xxxxxxx which xxxxxxxx the xxxxxxx is xxxxxxx into xxxxx on xxx industry xxxxxxxxx we xxxxxxxxx whether xxx particular xxxxx is xxxxxxxxxx or xxxxxxxxxxx on xxx above xxxxxxxxx metrics xxxxxxxxxxxxx all xxx above xxxxxxx used xxx stock xxxxxxxxx can xxxxxx into xxxxxxxxx valuation xxxxx for x similar xxxxx Though xxx facts xxx figures xxx be xxxx but xxx to xxx different xxxxxxxxx technique xxx price xxxxxxx for xxxxxx could xx different xx a xxxxxx most xx the xxxxx the xxxxxxxx uses x blended xxxxxxxxx technique xx this xxxxxx he xxx gives xxxxxxxxxx to xxxx valuation xxxxxx and xxxxx to xxx price xxxxx considering xxx above xxxxxxx that xxxxx s xxx valuation xx not xxxxxxx referred xx a xxxxxxx but xxxxxxxxxx an xxx as xxxx References xxxx D x April xxxxxxxx Discount xxxxx http xxxxx stern xxx edu xxxxxxxx New xxxx Page xxxxxxxx ddm xxx John x and xxxxx H xxxxxxx Discounted xxxx Flow xxxx espace xxxxxxx uq xxx au xxxxx UQ x INTRODUCTIO xxx Jerald x P xxxxxx H xxxxxx R xxx John x Chapter x Equity xxxxxxxxx Applications xxx Process xxxxxx Asset xxxxxxxxx http xxxxx stern xxx edu xxxxxxxx New xxxx Page xxxxxxxx ddm xxx Absolute xxxxxxxxx http xxxx morningstar xxx classroom xxxxxx asp xxxxx amp xxx page xxx amp xx CMore Articles From Finance
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